CONTENTcgh.listedcompany.com/misc/ar/20190924-cgh-ar-2018-en.pdf · long-term debt of 1,079.8...

CONTENT

02

Message from Chairperson

17

Detail of Management Team & Company Secretary

06

Board of Directors

22

Financial Summary

04

Message from CEO

20

Vision and Mission

08

Detail of the Board of Directors

24

23

Highlight of our Portfolio

Financial Ratio

105

Related Party Transactions

127

Report of the Independent Certified Public Accountants

119

Management Discussion and Analysis

143

Notes to the Financial Statements

113

Financial Statements & performance

131

Financial Statements

126

Report of the Board of Directors

104

Internal Controls and Risk Management

33

Policies and Business Overview

55

Shareholding Structure

41

Nature of Business

70

Corporate Governance

39

General Information

58

Management Structure

51

Risk Management & Risk Factors

99

Corporate Social Responsibility

32

CGH Initiatives in 2018

COUNTRY GROUP HOLDINGS PCL 1

MESSAGE FROM

CHAIRPERSON

Sadawut TaechaubolChairperson

Dear Shareholders,

In the year 2018, the whole economy is at risk with high

degree of volatility and pressure, due to the US-China

trade war and Thailand’s political uncertainty. This

results in slowdown and lower than expected growth

for Thailand’s economy. Country Group Holdings PCL’s

net income from the Separate Financial Statement 2018

was 42.05 million baht. However, the net income from

Consolidated Financial Statement 2018 was -34.95

million baht, which mainly come from lower in share

of profit from investments in associates by 85% (34.39

million baht in 2018 vs. 243.06 million baht in 2017)

and higher finance cost from issuance of debenture of

1,079.8 million baht in 2017. As a result, the performance

and results in 2018 was lower-than-expected.

Furthermore, Country Group Securities Public Company

Limited (CGS), which is our core business, showed

significant improvement in both revenue and market

share in 2018. This happen due to the strategic

decision in 2015 to diversify its business from being a

pure retail brokerage business. Although change

in business strategy had revenue impacts in short

run, we began to see significant increased in income

from the securities brokerage, financial advisory

services, and other services in 2018. Moreover, CGS’s

market share also significantly improved. While

CGS was in the rank 23th in the industry for TFEX

products in 2017, the market share magnificently rose

to the rank 8th in 2018. In 2019, CGS will provide new

financial products for our clients, such as Derivative

Warrants and Structured Note, to booth the revenue and

diversify more product line into higher margin product.

On the other hand, currently, Padaeng Industry

Public Company Limited (PDI) had completely depleted

its mine and the company’s main income for the year

2018 only came from its 50 MW of operating solar farms

in Thailand and Japan. Despite of this situation, the

ANNUAL REPORT 20182

For the year 2019, I optimistically expect the businesses

to grow in better direction

company still has a strong balance sheet. Moreover,

under business transformation process, it will continue

to explore acquisition targets to bring immediate and

income into the company.

Another noteworthy was the opening of Chao Phraya

project in 2019 for Country Group Development Public

Company Limited (CGD), a leading real estate

development company. The opening would to introduce

two world class hotels which are Asia’s first waterfront

Four seasons private residences. As a result, this

project would CGD to realize strong profits and

increase the value of our investment significantly.

For the year 2019, I optimistically expect the businesses

to grow in better direction and help Country Group

Holdings PCL to grow sustainably and generate strong

return in long-run for our shareholders.


MESSAGE FROM

CHIEF EXECUTIVE OFFICER

Tommy TaechaubolChief Executive Officer

Dear Shareholders,

Country Group Holdings Public Company Limited (“CGH”)’s

net income for the year 2018 was -34.9 million baht, which

resulted in a reduction of net equity by 0.6%.

The performance of the company in 2018 was impacted by

three major factors. First of all, it was the volatile financial

markets which made investment trading at the CGH

difficult throughout the entire year. In 2018, the Thai SET

Index dropped by 10.8% from 1,753.7 to 1,563.9 with ongoing

volatility throughout the year. Interest rates in both the US

from 1.5% to 2.5% and Thai from 1.5% to 1.75% increased

during the year, creating challenges for fixed income

investments. In 2018, CGH recorded gains from investments

of 27.6 million baht down from 77.1 million baht, a decrease

of 64.2%. Although income from interest and dividends

increased to 36.7 million baht from 15.7 million baht, an

increase of 133.7%, the overall trading result was lower

than expected for the year.

The second major factor impacting the performance in

2018 was the reduction in income from its core subsidiary.

The operating result for the core subsidiary, Country Group

Securities Public Company Limited (“CGS”), was 17.3 million

baht, down from 45.7 million baht in 2017, a reduction of

62.1%. Although the company recorded significant growth

in virtually all product departments, it recorded 42.0 million

baht in provisions for client’s derivative positions which had

a significant accounting impact on its final net income.

In 2018, CGH recorded a share of income in associated

companies of 34.4 million baht down from 243.1 million baht,

a reduction of 85.9%. The majority of the impact came from

the performance of Padang Industries (PDI), which had a

significant reduction in net income due to the ceasing of

mining operations. The net income of PDI in 2018 was -41.8

million baht, down from 905.3 million baht in 2017, reflecting

a decrease of 104.6%.

Despite of this result, CGH is well placed for future growth.

The company maintains a very strong balance sheet with

its shareholders equity of 6,434.9 million baht, and low

long-term debt of 1,079.8 million baht, or interest bearing

DE ratio of only 0.16. Its subsidiaries and affiliates have

completed their respective corporate restructuring tasks and

continue to look for expansion opportunities. The next section

will elaborate more on two of the exciting companies within

the portfolio that have had significant changes in the year,

and their respective opportunities.

Country Group Securities Public Company Limited (“CGS”)

In 2018, CGS experienced considerable growth in almost

all of its business lines and is in the process of introducing

several more in its vision to be a full-service brokerage. Its

main brokerage increased to 212.5 million baht from 189.7

million baht (growth of 12.1% yoy) through the acquisition

of marketing teams. Its tfex revenues increased to 82.5

million baht from 9.5 million baht (growth of 765.1% yoy)

through the acquisition of marketing teams and through

the introduction of the block trade business. Special

emphasis was given to dormant business lines, such as

debenture underwriting, bond trading, selling agent all

of which performed strongly. Additionally, in 2018, CGS

expanded its infrastructure and human resources to allow

the service of Securities Borrowing and Lending (SBL)

and became licensed for new business lines of Private

Fund Management, Structured Notes and Derivative

ANNUAL REPORT 20184

In the coming year, CGH expects that the businesses within its portfolio should improve following major structural changes.

Warrants. These new businesses are now in operation and

expected to contribute additional income in 2019. With its

front line to back line staff ratio increasing from 1.29 to 1.65

in 2017 to 2018, the company is well positioned for growth.

Padaeng Industry Public Company Limited (“PDI”)

In 2018, PDI recorded a net loss of 41.8 million baht a

decrease of 947.0 million baht or decrease of 104.6%. This

was an expected result due to the ceasing of mining operations

and additional provisions associated with the closure of

mining operations. The company’s main income going

forward will come from its 50 MW of operating solar farms in

Thailand and Japan. The company has reduced its operating

costs significantly and the number of full-time employees is

75 and reducing. PDI currently has a strong balance sheet

with 4,703.2 million baht in shareholders’ equity of which the

majority is in near cash assets and non-core mining assets

available for sale. It continues to explore acquisition targets

that can bring immediate income to the company.

In the coming year, CGH expects that the businesses

within its portfolio should improve following major structural

changes. It will continue to prudently look for investments

in well established companies or assets that can contribute

to its operating performance immediately. On behalf of the

management team I would like to thank all our stakeholders

for their continued support. The management team is fully

dedicated to realizing our vision of becoming a fast growing,

professional and diverse holding company. We will continue

to invest and operate diligently to maximize returns for all

of our stakeholders.


Sadawut TaechaubolChairperson and Chairperson of the Executive Board of Director

Dej NamsirikulIndependent Director

SurabhonKwunchaithunyaVice Chairperson

Tommy TaechaubolDirector and Chief Executive Officer

BOARD

OF DIRECTORS

ANNUAL REPORT 20186

Dr.Veeraphat PhetcharakuptDirector

Pol.Gen. WerapongChuenpagdeeIndependent Director

JitmaneeSuwannapoolIndependent Director

Niphon WisityuthasartIndependent Director

Pisuth ViriyamettakulDirector


DETAIL OF THE BOARD

OF DIRECTORS

Position• Chairperson and Chairperson of the Executive

Board of Directors (Appointed on 15/05/2014)

Mr. Sadawut TaechaubolChairperson and Chairperson of the Executive Board of Director

Education• Business Administration graduate (with distinction),

Kensington University, California, USA

• Commerce Diploma, Davis School, Brighton, UK

• Bachelor of Arts in Political Science,

Ramkhamhaeng University

Director Role Training by Thai Institute of Directors Association (IOD)• Director Accreditation Program (DAP), Class 66/2007

• Corporate Governance for Capital Market Intermediaries

Program (CGI), Class 14/2016

Shareholding (%)• 13.94%

Family Relationship

• Father of Mr. Tommy Taechaubol

(Director and Chief Executive Officer)

Last 5 years experience

• Director of 4 Listed Companies

• Other important of 1 positions

1 Dec 2018 - Present2015 - Present

2014 - Present

2012 - Present

23 Nov 2017 - Present

Acting Managing DirectorPadaeng Industry PCL, ResourceDirector and Chairperson of the Executive Board of Directors, Padaeng Industry PCL, ResourceChairperson and Chairperson of the Executive Board of Directors, Country Group Holdings PCL, HoldingDirector and Chairperson of the Executive Board of Directors MFC Asset Management PCL, Financial

Advisor to the Minister of Labor Ministry of Labour, Government

• Director of 8 Non-Listed Companies

2015 - Present

2015 - Present

2015 - Present

2013 - Present

2010 - Present

2010 - Present

2006 - Present

1994 - Present

Director, EDP Enterprise Co., Ltd.,Property DevelopmentDirector, Asia Zone Venture Co., Ltd., Property DevelopmentDirector, BBT Enterprise Co., Ltd., Property DevelopmentExecutive Directors, China Overseas Exchange Association, Chinese OrganizationChairperson Sing Sian Yer Pao Co. Ltd. NewspaperChairperson Thai Chamber of Commerce and Industry, AssociationDirector Baan Rai Taechaubol Co., Ltd. Property DevelopmentChairperson Country Group Co., Ltd. Property Development

• Certificate for High Level Executive,

Capital Market Academy (CMA12), Class 12/2011

• Thailand Energy Academy (TEA), Class 7/2016

• Global Business Leaders (GBL), Lead Business Institute,

Class 2/2017

Age (Years) 66

ANNUAL REPORT 20188

Position• Vice Chairperson (Appointed on 15/05/2014)

• Chairperson of Risk Management Committee (Appointed on 24/06/2014)

• Chairperson of Investment Committee (Appointed on 24/06/2014)

Mr. Surabhon KwunchaithunyaVice Chairperson

Education• Master of Business Administration (MBA)

(sponsored by the University’s scholarship),

University of Washington, USA

• Bachelor of Industrial Engineering

(sponsored by the University’s

scholarship), University of Washington, USA

• Bachelor of Electrical Engineering,

University of Washington, USA

Director Role Training by Thai Institute of Directors Association (IOD)

• Director Accreditation Program (DAP), Class 14/2004

• Director Certification Program (DCP), Class 44/2004

• Role of the Chairperson Program (RCP), Class 32/2013



Shareholding (%)• 10 Shares

Family Relationship• None



2016 - 2018

2014 - Present

2011 - Present

2003 - Present

Directors, Triton Holding PCL, Holding

Vice Chairperson, Chairperson of the Risk

Management Committee, and Chairperson of the

Investment Committee, Country Group Holdings

PCL, Holding

Director, Executive Director, Chairperson of the

Nomination and Remuneration Committee and

Member of the Good Corporate Governance

Committee, MFC Asset Management PCL,

Financial

Independent Director and Chairperson of the Audit

Committee, Tycoons Worldwide Group (Thailand)

PCL, Industrial


Chairperson, Country Group Securities PCL,

Financial

Director, Chairperson of Risk Management

Committee and Member of the Discipline

Committee, The Stock Exchange of Thailand

Director, Thailand Futures Exchange PCL

Director and Vice Executive Chairperson,

Country Group Securities PCL, Financial

2016 - Present

2010 - 2012

2010 - 2012

2006 - 2015

• Securitization, Fannie Mae of USA

• Certificate for High Level Executive, Capital Market

Academy 11 (CMA11), Class 11/2010

• Finance and Banking by HSBC (Hongkong)

Age (Years) 67


DETAIL OF THE BOARD

OF DIRECTORS

Position• Director (Appointed on 22/05/2014)

• Chief Executive Officer (Appointed on 22/05/2014)

• Member of the Investment Committee (Appointed on 24/06/2014)

Mr. Tommy TaechaubolDirector and Chief Executive Officer

Education• Master of Business Administration (MBA) (with distinction),

Sasin Graduate Institute of Business Administration of

Chulalongkorn University

• Bachelor of Laws, The University of New

South Wales, Australia

• Bachelor of Commerce in Finance Major (with distinction)

The University of New South Wales, Australia




• Real Estate Development RE-CU, Class 40 by The Real

Estate Executive Association of Chulalongkorn University


Family Relationship

• Son of Mr. Sadawut Taechaubol

(Chairperson and Chairperson of

the Executive Board of Directors)



2015 - Present

2014 - Present

2014 - Present

2011 - 2014

Director, Executive Committee Member and Member of the Nomination and Remuneration Committee, Padaeng Industry PCL, ResourceDirector, Chief Executive Officer and Member of the Investment Committee, Country Group Holdings PCL, HoldingAdvisor to the Executive Committee MFC Asset Management PCL, FinancialFirst Executive Vice President, Business Development Division, MFC Asset Management PCL, Financial


2016 - Present

2016 - Present2012 - Jan 20172010 - Dec 2017

2006 - Present

2005 - Present

Director, Genki Capital Co., Ltd., Energy and Lending BusinessDirector, Genki Power One Co., Ltd., EnergyDirector, Country Group Securities PCL, FinancialChairperson of the Executive Board of Directors Sing Sian Yer Pao Co. Ltd., NewspaperDirector, Baan Rai Taechaubol Co., Ltd., Property DevelopmentDirector, Country Group Co., Ltd.,Property Development

Age (Years) 35

ANNUAL REPORT 201810

Position• Independent Director (Appointed on 22/05/2014)• Member of the Good Corporate Governance Committee (Appointed on 24/06/2014)• Chairperson of the Nomination and Remuneration Committee (Appointed on 11/11/2016)

Mr. Dej NamsirikulIndependent Director

Education• High School Diploma, Assumption Bangrak


• Director Accreditation Program (DAP), Class 98/2012




Shareholding (%)• None




2014 - Present

1993 - Present

Independent Director, Chairperson of the

Nomination and Remuniration Country Group

Holdings PCL, Holding

Committee and Member of the Good Corporate

Governance Committee Director

Vejthani Hospital PCL, Hospital


Chairperson, Unicca Pattaya Properties

Co.,Ltd., Property

Independent Director, Member of the Audit

Committee and Vice Chairman,

Country Group Securities PCL, Financial

Chairperson, Union Power Properties Co.,Ltd.,

Property & Construction

Director, Omnoi Complex Co., Ltd., Property

Director, D.U.K Co., Ltd., Property

2010 - Present

2006 - Mar 2016

1994 - Present

1989 - Present

1982 - Present

Age (Years) 83


DETAIL OF THE BOARD

OF DIRECTORS

Position• Independent Director (Appointed on 22/05/2014)• Member of the Audit Committee (Appointed on 24/06/2014)• Chairperson of the Good Corporate Governance Committee (Appointed on 24/06/2014)• Member of the Nomination and Remuneration Committee (Appointed on 11/11/2016)

Pol.Gen. Werapong ChuenpagdeeIndependent Director

Education• Master of Public Administration, National

Institute of Development Administration (NIDA)

• Master of Public Administration,

Chulalongkorn University

• Bachelor of Public Administration from

the Royal Police Cadet Academy



• Audit Committee Program (ACP), Class 34/2011

• Financial Statements for Directors Program (FSD),

Class 12/2011


Family Relationship

• None


• Director of 3 Listed Companies • Director of 5 Non-Listed Companies

Age (Years) 60

• Role of the Compensation Committee Program (RCC),

Class 13/2011



2018 - Present

2014 - Present

2009 - Present

Deputy Chairman and Independent

Director, Triton Holding PCL, Holding


Committee, Chairperson of the Good

Corporate Governance Committee and

Member of the Nomination and Remuniration

Committee, Country Group Holdings PCL,

Holding


Committee and Member of the Nomination

and Remuniration Committee, Country Group

Development PCL, Property & Construction

Oct 2018 - Present

Aug 2017 - Present

2012 - Present

2012 - Present

2010 - Present

2017 - 2018

2017 - 2018

2016 - 2017


Committee, Tribeca Co., Ltd., Property

Chairperson and Independent Director,

Arinsiri Land PCL, Property


Committee,Thai Hua Rubber PCL, Rubber

Director, Foo Sin Mining Industry Co., Ltd., Metal

Director, Independent Director and Chairperson of

the Audit Committee, Sing Sian Yer Pao Co. Ltd.,

Newspaper

Chairperson, Strega PCL, Construction

Special Advisor, The Royal Thai Police, Government

Assistant of Commissioner, The Royal Thai Police,

Government




Program (CGI)


Position• Independent Director (Appointed on 22/05/2014)• Chairperson of the Audit Committee (Appointed on 24/06/2014)• Member of the Nomination and Remuneration Committee (Appointed on 24/06/2014)

Mr. Niphon WisityuthasartIndependent Director



• Bachelor of Law, Thammasart University

• Certificate for High Level Executive Capital

Market Academy (CMA12)

• Advanced Certificate Course in Public relation for Executives, Class 2

• Advanced Certificate Course in Urban development class

for Executives, Class 3

• Certificate in Asian Disaster Preparedness Center (ADPC)

• Thailand Energy Academy (TEA), Class 7/2016

• Advance Master Management Program ( AMM)

• AC HOT UPDATE : Ready to New CG towards sustainability, FAP





2014 - Present

2010 - Sep 2018

1999 - Present

Independent Director, Chairperson of the Audit

Committee and Member of the Nomination and

Remuneration Committee, Country Group

Holdings PCL, Holding

Independent Director, Chairperson of Audit

Committee and Member of the Nomination and

Remuneration Committee Member, Grand Canal

Land PCL Property & Construction

Independent Director and Chairperson of the

Audit Committee, Vanachai Group, PCL Property

& Construction

Independent Director,

Country Group Securities. PCL, Financial

2011 - 2016

Age (Years) 79


DETAIL OF THE BOARD

OF DIRECTORS

Mrs. Jitmanee SuwannapoolIndependent Director



• Bachelor Degree in Business Law, Ramkhamhaeng University

• Bachelor of Business Administration Program in Account

Ramkhamhaeng University

Director Role Training by Thai Institute of Directors Association (IOD)• Director Certification Program (DCP), Class 197/2014 • AC HOT UPDATE : Ready to New CG towards sustainability,

FAP


Family Relationship

• None



2016 - Present

2015 - Present

2014 - Present

Independent Director and Member of the Audit Committee, Country Group Holdings PCL, HoldingIndependent Director and Member of the Audit Committee, NCL International Logistics PCL, The National Legislative AssemblyIndependent Director and Member of the Audit Committee, Grand Canal Land PCL, Property


• Other important of 3 positions

May 2018 - Present

2015 - April 2018

2018 - Present

2015 - Present

2014 - Present

Consultants, Thailand Privilege Card Co., LTd.,Providing foreign tourist facilities that are members in tourism in Thailand.Independent Director and Chairperson of the Audit Committee, Thailand Privilege Card Co., LTd., Providing foreign tourist facilities that are members in tourism in Thailand.

Member of the Audit Committee, Eastern Economic Corridor (EEC)Honorary counsel, Economic Commission Finance and finance, The National Legislative Assembly, The National Legislative Assembly Chairperson, People Develop Center, Develop people to be honest and do social and environmental benefits.

Age (Years) 65

Position• Independent Director (Appointed on 11/11/2016)

• Member of the Audit Committee (Appointed on 11/11/2016)


Position• Director (Appointed on 28/07/2015)

Mr. Pisuth ViriyamettakulDirector

Education• Master of Business Administration Finance,

California State University, Long Beach, USA

• Bachelor of International Business

Management, Assumption University (ABAC)


• Director Accreditation Program (DCP), Class 178/2013

• Director Financial Statements For Directors Program (FSD),

Class 31/2016





2015 - Present Director, Country Group Holdings PCL,

Holding


Director, Teparak Phatthanakan Co., Ltd.,

Property

Director and Managing Director , CMT

Network Solutions Co., Ltd., Installed

Communication Systems

Director, Ratchada Office Building Co., Ltd.,

Property

2012 - Present

2012 - Present

2013 - Present

Age (Years) 37


DETAIL OF THE BOARD

OF DIRECTORS

Dr.Veeraphat PhetcharakuptDirector

Education• Doctor of Philosophy in Finance, University of

Essex, 2008

• Master of Science in Finance, University of Essex, 2004

• Bachelor of Business Administration Program in Finance

and BankingChulalongkorn University, 2011

• CFA Levell III, CFA Institute





Family Relationship

• None



2016 - Present

2014 - Present

Director, Country Group Holdings PCL,HoldingIndependent Director and Member of the Audit Committee, Asian Insulators PCL, Electrical Insulators


Nov 2016 - Present2016 - Present

2016 - Present2016 - Present2016 - Present

Director and Chief Executive Officer,Country Group Securities PCL, FinancialDirector, Genki Capital Co., Ltd., Energy and Lending BusinessDirector, Genki Power One Co., Ltd., EnergyDirector, Sun Change Co., Ltd., EnergyDirector, Tech Reform Co., Ltd., Energy

Age (Years) 38

Position• Director (Appointed 4/5/2016)

Position• Independent Director (Appointed on 11/11/2016)

• Member of the Audit Committee (Appointed on 11/11/2016)


DETAIL OF MANAGEMENT

TEAM & COMPANY SECRETARYAS OF DECEMBER 31, 2018

2015 - Present Vice President, Country Group Holdings PLC, Holding

2011 - 2015 Assistant Manager, Samsung Electric (Thailand) Co.,Ltd., Technology

Mr. Annop KettratadVice President, Corporate Strategy Division

Age (Years) 36

Education• Master Degree in Business Administration, Sasin Graduate Institute of Business Administration of Chulalongkorn University


2018 - Present Vice Presiden, Country Group Holdings PLC, Holding

2016 - 2018 Vice President, Country Group Securities PLC, Brokerage

2012 - 2015 Fund Manager, MFC Asset Management PLC, Financial

Mr. Voradej Suruchugul*Vice President, Finance and Accounting Division

Age (Years) 40

Education• Master Degree in Business Administration, National Institute of Development Administration



2008 - 2014 Senior Manager, MFC Asset Management PLC, Financial

Mr. Kaweewat PothanunVice President, Investment Division

Age (Years) 40

Education• Master Degree in Business Administration, Chulalongkorn University




2015 - 2018 Senior HR Manager, Country Group Holdings PLC, Holding

2008 - 2015 HR Specialist, National ITMX Co., Ltd, Technology

Miss Nataporn Ratanachumnong**Vice President, Human Resoource Division

Age (Years) 45

Education• Master Degree in Arts (Information Science), Burapha University


2017 - Present Vice President and Company Secretary, Country Group Holdings PLC, Holding

2015 - 2017 Manager and Company Secretary, Country Group Securities PLC, Financial

2014 - 2015 Assistant Company Secretary, Buriram Sugar PLC, Agriculture

Remarks *Effective for Vice President of Accounting Division as of October 1, 2018 **Effective for Vice President of Humaan Division as of August 1, 2018

Mr. Pitakphol RoongrojsuwanVice President, BOD Secretaty and Legal Division

Age (Years) 27

Education• Bachelor Degree of Laws, Thammasat University



1 Advise the board of directors on the Company’s laws, rules and regulations and ensure the directors will follow the company’s

laws, rules and regulations

2 Encourage the board of directors to have knowledge and understanding of corporate governance and follow practices.

3 Prepare agenda and notice of the shareholders and board of directors meetings.

4 Arrange the shareholders and board of directors meetings in compliance with the Company’s laws, rules and regulations and

good practices.

5 Take minutes of the shareholders and board of directors meetings and ensure related parties will follow resolutions of the

shareholders and board of directors meetings.

6 Prepare and maintain the board of directors’ registration, annual reports, notice of the shareholders and board of directors

meetings, and Board of Directors meetings.minutes of the shareholders

7 Monitor the directors and management to make reports on their stakeholders including related persons’ stakeholders as specified

by the law.

8 Maintain the stakeholder reports reported by the directors or management as specified by laws.

9 Ensure information is disclosed. And report the information to the responsible regulators.

10 Coordinate with shareholders and regulators.

11 Other duties as assigned by the Board of Director.

Authorities of Company Secretary


Our vision is to be one of the fastest growing

and most diversified investment companies in

Thailand. We utilize our extensive network and

market insights to make investments and our

synergistic infrastructure to enhance their

performance.

VISION


MISSION

Strategic Acquisition:

• Identify untapped opportunities across targeted industries through our

well-established group network

• Diversify investment across strategic industries to minimize risk while

maximizing returns

• Capitalize resources across our synergistic affiliated companies to gain unique

insights in identifying stable and sustainable investment deals

Build for sustainable growth:

• Professional team, process, and experiences across several regions and

industries provide us with a well-established operational capability to

proactively and strategically manage our portfolio companies to deliver

sustained growth and consistent returns

• Capitalize on our unique ability to unlock all potential value from under-performing

assets

To deliver sustainable growth by making strategic long-term acquisitions and actively managing them to enhance performance


FINANCIAL SUMMARY

9,160.12

3,273.38

5,886.74

4,336.91

582.12

(34.95)

(0.0081)

0.96

4,163.43

30/09/2018

77.85

0.69

1.39

3.65

8,803.73

2,614.11

6,170.26

4,336.77

850.50

234.63

0.0540

1.35

5,854.64

30/09/2017

30.41

0.97

1.39

2.05

7,925.21

1,903.72

6,001.61

4,336.77

1,357.63

391.33

0.0902

1.61

6,982.20

30/09/2016

23.11

1.17

1.37

2.86

Assets

Liabilities

Equity

Paid-up Capital

Total revenues

Net Profit

Earning per share (Baht)

Last Price(Baht)

Market Cap. (Million Baht)

F/S Period (As of date)

P/E (Times)

P/BV (Times)

Book Value per share (Baht)

Dvd. Yield(%)

* Referance from Stock Exchange of Thailand

FINANCIAL DATA

STATISTICS AS OF*

Unit: Million Baht

FINANCIAL STATEMENTS 31 DECEMBER 2018 31 DECEMBER 2017 31 DECEMBER 2016


PROFITABILITY RATIO

Gross profit

Net profit (loss)

Return on equity

Return on investment

EFFECIENCY RATIO

Return on asset

Asset Turnover

FINANCIAL RATIO

Liquid assets to borrowing

Earning assets to borrowing

Liquid assets to total asset ratio

Earning assets to total asset ratio

Debt to equity

Dividend payout

OTHERS RATIO

Securities investment to total assets

Net capital ration (NCR) - CGS

PER SHARE

Earnings per share

Dividends

Book Value

GROWTH RATE

Total assets

Total liabilities

Securities buisness income

Operating expenses

Net profit (loss)

FINANCIAL RATIO

%

%

%

%

%

Time

Time

Time

%

%

Time

%

Time

Time

Baht

Baht

Baht

%

%

%

%

%

69.11

(5.69)

(1.16)

8.61

0.78

0.14

4.63

6.20

63.02

67.42

0.56

-

67.44

99.02

(0.0081)

-

1.35

4.05

25.22

(2.70)

7.85

(114.97)

2018 2017 2016

* N/A due to CGH and its subsidiaries have no borrowing in the Consolidated financial statements** Dividend payout ratio is only CGH

84.30

27.55

7.68

18.13

5.94

0.20

4.57

4.43

63.52

61.62

0.42

40.21**

67.47

132.35

0.0540

0.0277

1.42

11.09

37.32

(35.29)

(32.62)

(40.12)

90.00

28.82

6.62

10.21

5.73

0.18

*

*

60.94

73.91

0.32

25.21**

57.27

93.10

0.0902

0.0460

1.38

14.38

74.74

(21.83)

(12.88)

545.70


Country Group Holdings PCL (CGH) is an investment holding company listed on the Stock Exchange of Thailand (SET) that makes long term investments across multiple sectors.

We focus on the acquisition of controlling stakes in established businesses that can be improved by implementing our management expertise and drawing from the Group’s synergistic advantages.

HIGHLIGHT OF OUR PORTFOLIO IN 2018

COUNTRY GROUP HOLDINGS (CGH)

Securities investment to total assets

67.44%

Liquid assets to total asset ratio

Return onInvestment

Debt to equity ratio Liquid assets to borrowing ratio

Certificate from Thailand’s Private Sector Collective Action Coalition

against Corruption

BBB-

8.61%

63.02%

0.56Times

4.63Times


Country Group Securities PCL (CGS) is a leading, full-service securities brokerage firm in Thailand. CGS is a well-known securities company with 40 years of experience in the industry and nine consecutive years of profit.


COUNTRY GROUP SECURITY (CGS)

Gross profit

80.27%

Total Revenue

534.79Million Baht

Total Assets

5,084.01Million Baht

Net Capital Ratio (NCR)

99.02%

Liquid assets to total assets ratio

57.54%

Debts to equity

0.77Times

Earning assets to total assets ratio

87.17%


MFC asset Management PCL (MFC) is Thailand’s oldest Asset Management Company. Founded by the Thai ministry of Finance on December 29, 1975 it is now a private, fully licensed fund manager and remains Thailand’s only listed asset management firm.

MFC ASSET MANAGEMENT PCL (MFC)


Net income

168.08Million Baht

913.94Million Baht

In total assetsEBITDA

Total revenue Debt to equity ratio


221.54Million Baht

0.18Times


Padaeng Industry Public Company Limited (PDI) is a leading producer of special high-grade zinc metal and customized zinc alloys. In 2014, PDI has restructured its operations to move towards Green Business and bring sustainable growth to the Company by establishing three groups of businesses: PDI Energy, PDI Materials, and PDI Eco


PADAENG INDUSTRY PCL (PDI)

Total revenue


Current ratioEBITDA

Net cash Debt to equity ratio

183.22Million Baht

3.82Times

886.66Million Baht

0.49Times


CGH INITIATIVES IN 2018COUNTRY GROUP HOLDINGS (CGH)

Earning assete to total asset ratio

Earning assets to borrowing

6.20Times

Total asset growth Gross profit margin

69.11%

4.00%

67.42%


POLICIES AND BUSINESS OVERVIEW

Country Group Holdings PCL (CGH) was registered as a public company on May 15, 2014. The Company is a holding company with

major source of revenue coming from its shareholdings in other companies. At the present time, the Company has 6,143,905,902

baht in registered capital and 4,336,906,384 in paid-up capital. After the restructuring, Country Group Securities PCL (CGS) was

established as the core subsidiary company. CGH’s subsidiaries and affiliates also include Genki Capital Co.,Ltd., MFC Asset

Management PCL (MFC) Padaeng Industry PCL (PDI) and Country Group Development PCL (CGD).

CGS was originally known as “Atkinson Enterprises Company Limited,” and was registered in 1966. In 1974, Atkinson was

permitted to operate in Securities Business. In 1991, its common shares were allowed to be used as securities in the Stock

Exchange of Thailand (SET), with the company later changing its name to CGS in 2009.

On April 29, 2014, CGS shareholders resolution approved the company to restructure its business operations at the 2014 General

Shareholders’ Meeting. Under this resolution, the company established CGH as its holding company, and registered it in the SET

to replace the Securities Company’s common shares on January 8, 2015. This increased its capabilities and business development

opportunities for future growth, as well as offering greater flexibility in operating new ventures. The Company made an offer to

purchase all the securities from the Securities Company at an exchange rate of one common share of the Securities Company for

one common share of the Company. After successfully making the offer, CGH became CGS majority shareholder.

01


1 Vision mission and objectives

VisionOur vision is to be one of the fastest growing and most diverse investment companies in Thailand. We utilize our extensive network

and market insights to make investments and our synergistic infrastructure to enhance their performance.

MissionTo deliver sustainable growth by making strategic long-term acquisitions, and actively managing them to enhance their performance

Strategic Acquisition:

• Identify untapped opportunities across targeted industries through our well-established group network

• Diversify investment across strategic industries to minimize risk while maximizing returns

• Capitalize resources across our synergistic affiliated companies to gain unique insights in identifying stable and sustainable

investment deals

Build for sustainable growth:

• Professional team, process, and experiences across several regions and industries provide us with a well-established operational

capability to proactively and strategically manage our portfolio companies to deliver sustained growth and consistent returns

• Capitalize on our unique ability to unlock all potential value from under-performing assets

Business Objective

CGH’s vision is to be the leading Investment Holding Company in Thailand. We believe in building a team consisting of experts across

difference fields. This will allow us to diversify our investments across many industries and yield superior returns. Moreover, each of

our subsidiaries and associates is leader in its own industries. All of them also have a high liquidity ratio. Our business portfolio spans

across the following industries: brokerage, real estate, fund management, and energy. This enables us to focus on both short- and

long-term investments across multiple sectors.

To be the leading investment company in Thailand, we have set our proactive strategy in delivering sustained growth and consistent

returns to stakeholders. We believe in resource capitalization and efficient operation cost across all subsidiaries allowing for superior

returns. Furthermore, agility in investment opportunities and business expansions are the keys to maximizing returns and minimizing

risk to produce infinite growth towards the future.

Business Strategies

CGH focuses on both short- and long-term investments. Our core long-term investments are focused on well-established income

generating companies, whilst short term investments are focused on superior return opportunities. Both types of investments are

managed alongside to achieve optimal value and lucrative returns to either distributed back to shareholders or reinvested.

For our core Brokerage business, CGH plans to increase its competitive edge by developing superior customer services, offering new

investment products, upgrading the information technology infrastructure, and offering an insightful equities analysis report.

Moreover, in order to minimize the risk of overly relying on the brokerage fee as our main stream of revenue, CGH plans to diversify its

resources into other high contribution products. These products include Proprietary Trading, Bonds, Institutions (both local and foreign),

and Private Wealth. CGH also plans to manage CGS’s resources efficiently and minimize the SG&A expenses in order to maintain its

income and profitability.


YEAR MAJOR CHANGES AND DEVELOPMENTS

2 Major changes and developments in the past three years

2016

• The headquarters were relocated to 132 Sinthorn Tower 3, 20th floor, Wireless Road, Tambon Lumpini,

Prathumwan District, Bangkok Metropolitan on May 1, 2016.

• Establishment of Genki Power on Feb 1, 2016 with capital of 100-Million-Baht.

• Appointment of Suraphon Kwanchaithany as the titles of Vice Chairman and Director (non-authorized director)

and Dr. Veeraphat Phetcharakupt as Director (authorized director) effective as of May 4, 2016.

• Sadawut Taechaubol could sign using the Company’s seal, or Tommy Taechaubol and Dr. Veeraphat

Phetcharakuptcould jointly sign with the Company’s seal and legally act on its behalf.

• Cancelled the Company’s Option Issuing Program to Directors, Management, staff, and/or the Company’s advisors

and CGH-ESOP 1.

• Reduced the Company’s registered capital from 7,015,571,370 baht to 5,553,543,822 baht by eliminating

1,462,027,548 shares of its unoffered stock at a rate of 1 baht per share, as well as amending Clause 4 of the

Company’s memorandum of association to comply with the registered reduction in capital.

• Increased shareholding in Padaeng Industry PCL, with the Company holding 24.9 percent of paid registered

capital as of the end of 2016.

• Issued and offered common shares in order to increase capital by 92,384,094 shares at a value of one baht per

share in order to implement CGH’s First Common Share Option (CGH-W1).

• Issued and offered of 430 million General Mandate common shares at one baht per share were done to implement

Private Placement.

• The Company’s registered capital increased from 5,553,543,822 baht to 6,075,927,916 baht as a result of the

issuing of 522,384,094 General Mandates common shares at a value of one baht per share and amending the

capital increase.

• Appointment of Jitramanee Suwanpool in the position of Independent Director and Auditing Director on November

11, 2016 to replace Pitinun Matitanaviroon who resigned.

• At the time, the Company had 6,075,927,916 baht in registered capital and 4,336,768,278 baht in paid-up capital.


• Somkad Sueptrakul resigned from the Board of Directors, his role as Chairman of the Investment Committee,

and the Risk Management Committee on February 27, 2017.

• Reduced registered capital from 6,075,927,916 baht to 4,336,768,278 baht by eliminating 430 million unsold

shares with a price of one baht per share, and added four clauses in its memorandum of association to comply

with the capital reduction.

• Increased registered capital from 4,336,768,278 baht to 6,075,927,916 baht by issuing 430 million new ordinary

shares to increase capital at a price of one baht per share and adjusted four clauses of the Company’s

Memorandum of Association to comply with its increase in registered capital.

• At present, the Company has registered capital totaling to 6,075,927,916 baht, and has already paid capital

amounting to 4,336,768,278 baht.

• Changed the registered company’s name from Genki Power Co. Ltd to Genki Capital Co. Ltd on May

17, 2017.

• Issued and offered Securities Type 69 – DEBT – II/HNW (institutional investors/high net worth, which

name-registered, unsubordinated and unsecured debentures with debenture holder’s representative

debentures at an amount of 1.5 billion baht with a par value of one baht per share to receive approval and

offering for private placement with a holding period of two years and six months at a fixed interest rate of

6.25 percent per annum calculated every three months from the issue date. Its price was set at 1000 baht

per unit. The minimum reservation fee for each purchase was set at 100,000 baht, and they could be

purchased in increments of 100,000 baht.

• Reduced the Company’s registered capital from 6,075,927,916 baht to 4,698,271244 baht by cancelling

1,277,656,672 unsold Company shares valued at one baht per share, while also amending Clause 4 of its

Memorandum of Association (MOA) to comply with the reduction in registered capital.

• Issued and offered for sale warrants to purchase ordinary shares of the Company (CGH-W3) amounting to

no more than 1,445,634,658 units to be allocated to existing shareholders in proportion to shares held.

• Increased registered capital from 4,698,271,244 baht to 6,143,905,902 baht by issuing 1,445,634,658 ordinary

shares with a par value of one baht per share, as well as modifying Clause 4 of the Company’s MOA to comply

with the increase in registered capital.

• At present, the Company’s registered capital amounts to 6,143,905,902 baht, with paid capital of 4,336,906,384

baht.

YEAR MAJOR CHANGES AND DEVELOPMENTS

2017

2018


1.2 BUSINESS GROUP STRUCTURE

Business Policy of the Company and its Subsidiaries

In 2018, the business policies of the Company and its subsidiaries were as follows:

Company’s Business

The Company will operate as an investment holding company with the following activities:

• Investing in subsidiaries and associated companies within the Company’s group

• Sourcing funds for the Company, its subsidiaries, and associated companies

• Investing in other companies (besides the Company’s group) to maintain a liquid portfolio and generate superior returns. The core

business of CGH subsidiaries needs to be in the financial business, unless the investment value does not exceed 25 percent

of CGH’s consolidated total assets.

• Getting support from the securities company (outsourcing) to utilize human resources. The securities company will provide support

and advisory services to the Company:

- Services in risk management

- Services in information technology systems

In addition, the Company has set up a Monitoring Department for controlling investment policy and corporate governance of the invested

companies relating to supervision of its subsidiaries and associated companies. The subsidiaries and associated companies will be

operating under the Company’s Guidelines and Policies.

Subsidiaries

Country Group Securities Public Company Limited

CGS, formally known as “Adkinson Enterprise Company Limited” was established in 1966 and was granted its securities business

license in 1974 as Broker Number 3 by the SET’s Board of Governors. Later, the company was approved by the Ministry of Finance to

be listed on the SET in 1991.

Country Group Holdings PLC (CGH) replaced CGS as part of a restructuring plan to become listed on the SET on up capital

of 2,589,743,484 baht. CGH thus became CGS’s majority shareholder – having over 99.30 percent of the CGS’s issued and paid

up shares. The securities company was granted the securities business license from the Ministry of Finance and the Office of the

Securities and Exchange Commission Thailand (SEC).

99.3% 25%24.9% 9% 100%


The company operates the following businesses:

1. Securities Brokerage

2. Securities Trading

3. Securities Underwriting

4. Investment Advisory

5. Mutual Fund Management

6. Private Fund Management

7. Stock Borrowing and Lending

8. Venture Capital Management

Furthermore, the securities company was also granted the derivatives business license from the SEC.

Genki Power Company Limited

Established on February 1, 2016 with capital 100-Million-Baht, paid-up capital 25-Million-Baht. The business objective is to produce

and distribute electric energy.


GENERAL INFORMATION02

Name : Country Group Holdings Public Company Limited (CGH)

Address : 132 Sindhorn Tower 3, 20th Floor

Wireless Road, Lumpini, Pathumwan Bangkok, Thailand 10330

Type of Business : Holding Company

Registration Number : 0107557000187

Telephone : 02-256-7999

Fax : 02-256-7888

Website : www.cgholdings.co.th

Registered Capital : 6,143,905,902 baht

Paid-up Capital : 4,336,906,384 baht

Type of Shares : 4,336,906,384 ordinary shares at par value of one baht per share

GENERAL INFORMATION

ENTITIES THAT THE COMPANY OWNS MORE THAN 10 PERCENT OF TOTAL STOCKS IN

Name : Country Group Securities Public Company Limited (CGS)

Address : 132 Sindhorn Tower 1, 3rd Floor and Sindhorn Tower 3, 18th, 20th Floor


Type of Business : Securities


Telephone : 02-205-7000

Fax : 02-205-7171

Website : www.cgsec.co.th



Type of Shares : 2,589,743,484 ordinary shares at par value of one baht per share

Name : MFC Asset Management Public Company Limited (MFC)

Address : 199 Column Tower, Ground Floor & 21st – 23rd Floors, Ratchadapisek

Road, Khlong Toei, Bangkok 10110

Type of Business : Financial


Telephone : 02-649-2000

Fax : 02-649-2100

Website : www.mfcfund.com

Registered Capital : 180,000,000 baht

Paid-up Capital : 125,615,708 baht

Type of Shares : 125,615,708 ordinary shares at par value of 1 baht per share


Name : Padaeng Industry Public Company Limited (PDI)

Address : 191/18-25 CTI Tower, Floor 26th-27th, Ratchadaphisek Road,

Khlong Toei, Bangkok, 10110

Type of Business : Resources


Telephone : 02-695-9499

Fax : 02-695-9495

Website : www.padaeng.com



Type of Shares : 226,000,100 ordinary shares at par value of 10 baht per share

Name : Genki Capital Company Limited

Address : 132 Sindhorn Tower 3, 20th Floor


Type of Business : Energy


Telephone : 02-256-7999

Fax : 02-256-7888

Website : None

Registered Capital : 100,000,000 baht

Paid-up Capital : 25,000,000 baht

Type of Shares : 10,000,000 shares ordinary shares at par value of 10 baht per share

OTHER REFERENCES

Share Registrar : Thailand Securities Depository Company Limited

Address : 93 The Stock Exchange of Thailand Building, Ratchadaphisek Road, Dindaeng,

Dindaeng, Bangkok 10400

Telephone : Tel. : 02-009-9000

Debt-holder Representative : None

Auditor : Wonlop Vilaivaravit, CPA Number 6797

Address 11/1 AIA, Sathorn Tower, Floor 23rd -27th, South Sathorn Road,

Yannawa, Sathorn Bangkok 10120

Telephone: 02-676-57000 Fax: 02-676-5757

Advisors or Management : None

under Management Contracts


NATURE OF BUSINESS03

3.1 Revenue structure of the company and its subsidiary

Unit : Million Baht

FOR THE YEARS ENDED DECEMBER 31,

AMOUNT AMOUNTAMOUNT % %%

2018 20162017REVENUES

Brokerage fees

Fee and services income

Interest on margin loans

Gain (loss) on investment and derivatives

Interest and dividends

Share of profit from investments

in associated companies

Income from the partial transfer of retail

securities business

Gain on classified investment in associate

to investment held as available for sale

Other income

Total revenues

3.2 Products and service

The majority of CGH’s revenue comes from its gain on equity investment from its subsidiary and associated companies (Holding

company). CGH’s core subsidiary is Country Group Securities PCL (“CGS”), a brokerage firm conducting the following businesses;

CGS has been approved by Ministry of Finance to operate the following eight businesses:

1. Securities brokerage

2. Securities trading

3. Securities underwriting

4. Investment advisory service

5. Mutual fund management

6. Private fund management

7. Securities borrowing and lending

8. Venture capital management

300.17

75.62

28.63

56.19

106.14

34.39

-

-

15.35

616.51

214.22

52.13

14.28

59.51

220.75

243.06

-

21.61

24.95

850.51

541.63

79.06

34.88

77.46

167.15

134.74

306.00

-

15.71

1,356.63

48.69

12.27

4.64

9.11

17.22

5.58

-

-

2.49

100.00

25.19

6.13

1.68

7.00

25.96

28.58

-

2.54

2.93

100.00

39.92

5.83

2.57

5.71

12.32

9.93

22.56

-

1.16

100.00


CGS has been approved by the SEC to Derivatives Business Sor 1 to operate the following four businesses:

1. Derivatives broker

2. Deri vatives dealer

3. Derivatives advisor

4. Derivatives fund management

Furthermore, CGS has obtained a Derivatives Business license from the Securities and Exchange Commission (SEC) to act as a

Derivatives Agent, and has also received approval to act in a Financial Advisory role.

1. Securities Trading Business

CGS has a policy to invest in both securities and bonds in the purpose of trading and investment. The Investment Committee was

appointed to determine clear investment guidelines and associated policies. Limits and Conditions are meticulously prepared for each

type of investment.

2. Brokerage Business

CGS is No. 3 of securities brokerage member of the SET. CGS provides brokerage services for individual, juristic, and institutional

clients, both local and foreign, through to focus on Bangkok and other provinces. To date, CGS provides highly experienced brokers

and teams of analysts that provide advice and answers (both technical and fundamental) for all client demands.

Moreover, investors are able to trade securities, read analyst reports, and find investment information through CGS’s website or mobile

phone applications (on iOS and Android). Clients can open up to three types of trading accounts with CGS: Cash, Cash Balance, and

Credit Balance.

As of 2018, CGS has 56,068 trading accounts, of which 9,904 accounts are actively traded.

For the past three years, CGS’s market shares and trading value were the following:

Policy on approving client credit lines

CGS sets clear policies on setting appropriate credit limits for clients. Such clear policies and guidelines help CGS to control and mitigate

clients’ investment risk to a satisfactory degree. The process of opening and approving new client accounts and their credit limits are

all documented in writing. The policy also mandates that IC should be aware of their customer’s investment profiles prior to providing

investment advice and to opening a new account. This ensures that CGS’s services will answer to all clients’ investment objectives, risk

appetites, conditions, and purchasing power.

CGS’s new clients credit limits policy is in line with the rules and regulations from the Stock Exchange of Thailand (SET) and the Stock

Exchange Commission of Thailand (SEC). We also have clear preventive measures against those who use the Brokerage as a mean

to money laundering or terrorist funding.

TRADING VALUE

SET

mai

Trading Value of CGS

Market share (%)

27,640,439.54

619,715.89

275,797.92

1.11

23,304,622.95

1,150,873.16

185,243.91

0.85

24,519,544.99

1,112,973.03

388,773.74

1.69

2018 2017 2016

Unit : Million


Approval Matrix

In order to increase the speed of new applicants’ processing, the approval matrix for a new applicant’s credit limit is as follows:

The Credit Committee consists of the following members:

1. Chief Executive Officer

2. Chief Operation Officer

3. Head of Securities Business Division

4. Head of Operation Division

5. Head of Risk Management Division

A credit line is “approved” when at least half of the attending committee members give their approval.

Policy on setting marginable securities

CGS’s policy only allow trading of marginable securities within the pre-approved list. The list is comprised of marginable securities

that are evaluated by their individual business performance, assets, and liquidity. The approved list, together with its interest rates, is

announced through CGS’s communication channels (per SET and SEC regulations).

CGS appointed the Risk Management Committee to set the list of marginable stocks and their interest rates. Clients can invest into

these equities through their Credit Balance accounts.

The Risk Management Committee consists of 1) Chief Operation Officer 2) Head of Research Division 3) Head of Risk management

Division. The client’s credit line is approved when at least two committee members agree to the approval. The list of marginable

securities and their initial margins is reviewed at least once every quarter.

The policy on the initial margin’s rate is categorized into groups based on different risk level per follow:

Notes - The securities type A, B, C and F are classified as liquid able equities and could be used as marginable securities for above credit limit ratio. - The securities type N are clarified as a non marginable securities, and are not applicable.

CREDIT LINE

Not exceeding Baht 2 million




More than Baht 150 million

Managers – Securities Business Div./Branch Office or of higher position

Head of Securities / Derivatives Business Div./or of higher position

Managing Director of Securities Business / Derivatives Business Div./ or of higher

Credit Committee or Higher

Executive Committee

AUTHORIZED PERSONS

TYPE

A

B

C

F

N

50

60

70

100

100

MARGIN’S RATE (%)


3. Derivatives Business

CGS has been authorized by the Securities and Exchange Commission, Thailand (SEC) to act as a derivatives agent beginning on

September 22, 2008. It provides derivatives trading services through investment advisers and has developed a system able to support

orders through other channels, examples including trade orders through the Internet. In addition, it provides investment advisors at all

its branches nationwide.

As of December 31, 2018, CGS had a market share of 5.03 percent. In 2018, it expanded its business by commencing block trading

in single stock futures, continuing to promote itself by arranging seminars providing information about products in the futures market

to investment advisors, preparing training seminars for clients, and cooperating with the SET to provide information through seminars

at CGS and the SET building to investors throughout the year.

For 2019, CGS has set a target of increasing its market share of the derivatives business to 4.00 percent. It thus has made

preparations to expand its retail customer base and increase the number of investment advisors available for derivatives trading,

in addition to supporting the growth of the futures market with new products down the line. This will serve as a channel to increase

CGS’s market share in 2019 and the following year.

4. Investment Advisory Business

The SEC has approved CGS’s conducting business in the Equities Investment Advisory industry. The sole responsibility of these

Advisers to their clients is to point out a particular equity’s value and the opportunity to invest in it. Such advice should be based

upon clients’ investment objectives, financial standing, liabilities, conditions, and risk appetite, along with the Adviser’s in-depth

knowledge of risk factors and experiences.

5. Investment Banking Business

CGS is one of the leaders in providing investment banking services, with an experienced and skilled team that has earned the trust and

acceptance of clients. The Investment Banking team provides strategic advice, appropriate financial management suited for individual

clients, including suggestions for mergers, financing, and potential risk management approaches.

The team’s expertise is a driving force in CGS’s ability to provide various services such as cross-border mergers, providing advice and

structuring companies offering to sell securities to the public, and arranging funds to pay back debts to financial institutions. CGS’s

investment banking team provides a variety of financial services to meet the needs of customers, including corporate and institutional ones.

5.1 Financial Advisory Business

CGS began its investment banking business in December 2006, which later was becoming a member of the Investment Banking Club

(IB) on January 23, 2007. In addition, as of March 21, 2017, it receivied additional permits from the SEC to serve as a financial advisor

until March 20, 2022. As of now, CGS’s investment banking team is experienced in handling matters pertaining to its specialty and

assisting a variety of clients, ranging from small to large including both domesticate and international clients. Its investment banking

services include mergers and acquisitions (M&A), advisory services for the issuing and offering of debt securities, and covering cus-

tomers of various types of industries in different regions (corporate and institutional investors).

Its investment banking services cover mergers and acquisitions for interested parties, public offerings, find suitable investors for joint

ventures, analysis of a business’ competitiveness, establish a proper financial structure, and provide advice on good corporate governance.

In regards to providing searches for suitable investment funding sources from financial institutions, CGS’s investment banking team

has a strong relationship with customers in regions that require funding from financial institutions. It also provides advice regarding the

level of loans, structure, and suitable loan types.

The investment banking team also provides services in the issuance and offering of securities to the public, the issuance and offering

of convertible debentures, research investment needs, and investment in securities.

CGS’s investment banking team has a strong relationship with clients, providing services and continuing relationships.


It provides financial advice including consultancy for various firms, emphasizing service and maintaining positive relationships with

customers, and providing professional advice according to stated goals and the best interests of the client. At present, CGS provides

the following services:

• Acting in an advisory role in the listing of securities on the SET

• Acting in an advisory role in the issuance of securities in the form of bonds: debentures, subordinated debentures, and equity

instruments: common shares and preference shares

• Acting in an advisory role for M&A both domestically and internationally, including cross-border M&A

• Acting in an advisory role in the appraisal of businesses, funding, and financial restructuring

• Acting in an advisory role for joint venture financing

• Offering advice as an independent financial advisor

• Other investment banking services, such as debt restructuring and business rehabilitation.

5.2 Securities Underwriting Business

CGS was granted the Securities Underwriting business license from the SEC on 19th November 2008. This strategic business expansion

is the extension of CGS’s Financial Advisory business. To other Institutions and Brokerages, CGS can provide its securities underwriting

services either as Lead Underwriter or Co-Underwriter.

6. Securities Borrowing and Lending Business (SBL)

On July 12, 2010, CGS obtained approval from the SEC to operate a Securities Borrowing and Lending (SBL) business. CGS’s clients

are thus able to lend their entire securities (debt-free) portfolio for a fee while clients who wish to borrow securities will have to pay a

fee. CGS’s policies for SBL are as follows:

1. CGS will lend only approved securities that are within the SET 100 and ETF to clients who wish to short sell.

2. Currently, short selling can only be done through client’s Cash, Cash Balance and Credit Balance.

3. Borrowers will be charged a borrowing fee by CGS. Lenders will receive a lending’s fee from CGS.

4. Rights to the lending securities will remain with the lender throughout the SBL period.

CGS believes that the SBL business will provide clients with an alternative choice of investment. During a period when the market is

highly volatile, SBL provides an alternative investment choice that is manageable within a client’s risk levels. Because of the growing

SBL market, CGS believes that the business will be one of the key drivers for its revenue. The goals for 2018 are as follows:

1. Develop the SBL trading system to better provide clients with more investment options

2. Expand the SBL customer base among potential institution and retail customers

7. Selling Agent Business

CGS is the Selling Agent 14 for Asset Management Companies (AMCs), totaling to over 200 funds. Coupled with our investment experts

who offer insightful advice, CGS believes that clients should have strong alternatives for diversifying their investments.

As of December 31, 2018, CGS act as the Selling Agent for the following AMCs:

1. Aberdeen Asset Management Co., Ltd.

2. Assets Plus Fund Management Co., Ltd.

3. CIMB-Principal Asset Management Co., Ltd.

4. Krungsri Asset Management Co.,Ltd..

5. Krung Thai Asset Management PCL

6. Land and House Fund Management Co., Ltd.

7. MFC Asset Management PCL

8. One Asset Management Co., Ltd.

9. Phatra Asset Management Co., Ltd.


10. Phillip Asset Management Co., Ltd.

11. Solaris Asset Management Co., Ltd.

12. SCB Asset Management Co., Ltd.

13. UOB Asset Management (Thailand) Co., Ltd.

14. TMB Asset Management Co., Ltd.

8. Fixed Income

CGS began its fixed income business as an investment alternative for clients with a high return on investment and low risk, as well as

offering a choice in the length of the investment horizon. Fixed income can take place through various means as customers are able

to either contact CGS to make trading arrangements or work through bond traders in order to finalize the price and quantity of bonds

that are to be traded. Clients can choose to invest in fixed income with suitable levels of risk and match the length of investment period

suited for their purposes.

9. Wealth Management Business

CGS recognizes the benefits of effective financial planning and the potential for returns on investment along with sustainable growth.

It thus set up a wealth management business in 2017 to acted as an advisor for investment planning to increase the opportunities and

investment choices suitable for personal banking and corporate customers to achieve their objectives and investment targets.

CGS has selected well-educated, skilled, and experienced personnel as consultants who can provide investment advice. In addition,

they also offer choices for investment in order to satisfy investors’ needs with efficient investments and the best possible returns under

acceptable levels of risk.

10. Private Fund Management Business

CGS received a permit from the SEC to commence its private fund management business on June 8, 2017. It provides investment

management services to high net worth clients, institutional clients, and juristic persons for the management of funds amounting to a

minimum of 10 million baht. As of 31 December 2018, Asset under management amount to 104,367,654.39 million baht which increased

by 184.44% YOY, compared to 36,693,405.18 million baht on 31 December 2017.

CGS emphasizes on presenting a diverse set of new investment portfolios in order to satisfy financial needs and create the best possible

return for clients with client-established degrees of risk under the work of highly experienced and skilled teams in fund management.

Clear investment fund management processes are included with international standard systematic tools. Furthermore, it has developed

a risk management system for the close evaluation of the risks in an investment portfolio.

In 2018 Private fund business has significant growth because of strong marketing strategy with consistent investment seminars which

held by our worldwide qualified fund managers (CFA certified) for customers.

In 2019, CGS initiate plan to invest more assets worldwide and variety of financial products, such as structured product and derivatives,

to diversify risk and deliver enhanced return for our clients. While the liquidity management services is also available for customers to

satisfy their future needed of fund, the Investment policy and allocation also can be flexibly changed by clients anytime. Asset under

management is expected to grow to approximately 1,000 million baht within 3 years.


Income Structure of CGS

Brokerage Fee

Fee and Service Income

Interest on margin loan

Gain and return on financial instruments

Share of gain from investment in wich equity method is applied

Profit from sales of investments in associated companies

Income from the partial transfer of retail securities business

Other Income

Total revenue

INCOME

SEPARATE FINANCIAL STATEMENTS

FOR THE YEAR ENDING DECEMBER 31,

2018 20162017

MILLION

BAHT

PERCENTAGE MILLION

BAHT

PERCENTAGE MILLION

BAHT

PERCENTAGE

Note: Please see the accompanying details covering investment policies under the subjects of ‘Assets used in the Business’ and CGS’s ‘Income Restructuring’ under the subject of ‘Analysis and Comments by Management.’

317.91

75.86

29.18

98.92

-

-

12.92

534.79

59.44

14.18

5.46

18.50

-

-

2.42

100.00

224.25

61.64

14.27

197.50

-

-

24.91

522.57

42.91

11.80

2.73

37.79

-

-

4.77

100.00

548.32

79.06

34.88

111.90

-

306.00

16.03

1,096.19

50.02

7.21

3.18

10.21

-

27.92

1.46

100.00


Ability to maintain New liquid Capital Ratio (NCR)

According to SEC regulations, the Securities company is required to maintain a minimum NCR ratio of seven percent of the general

liabilities and marginable securities’ value. As of December 31, 2018, CGS was able to maintain it NCR at 99.02 percent.

Competitive Conditions

The Thai stock market’s main gauge, Set index closed at 1,563 point on the last trading day of 2018, obtaining an annual loss of 10.8% from the start point at 1,753. The gauge climbed up gradually to reach an all-time-high level on 27th February before moved downward to its through of the year on the last trading session.

Key investment related factors in 2018

Federal Reserve Banks (FED) raised the interest rate 4 times in March, June, September and December respectively (25 basis points

each time) to a range of 2.25-2.5%. FED chairman, Jerome Powell also added that, the current policy rate is approaching the neutral

rate in long-run, which imply a slower pace of increment in 2019 with a possibility of 2-3 times rate hike.

US president, Donald Trump announced tax cut program for corporates from 35% to 21% in order to stimulate investment and spending

for private sector while raising up labor wages. In consequence, Dow Jones lift up on the back of solid earnings reports.

US Ten-year treasury yield jumped to its peak in the past eight year at around 3.2% in early October after FED chairman, Jerome Powell

announced that, there would be some more space for late hike. However, he changed his tone toward less hawkish in late November

as he proclaimed the current policy interest rate is imminent to neutral rate.

Trade dispute has erupted after US president, Donald Trump announced 25% tariffs on imported goods from China worth of US$34

billion on 6th July. Following the prior measure, Trump lifted 25% tariffs for another batch of imported goods from China worth of US$16

billion on 23thAugust. In aggregate, 1,102 items of goods in the list were imposed. Following to the US measures, China retaliated US

with 25% tax on 659 items of imported goods from USA worth of US$50 billion. Trade war has escalated again after Trump imposed

another 10% tariffs on 6,000 units of goods ranging from minerals, food products and apparels with a terms to increase further to 25%

in January 2019. However, Chinese officials struck back with a moderate measure at 5-10% on US$6 billion worth of imported goods

from USA. Trader war has slightly cooled off since Xi J inping, the president of the People’s Republic of China held a trade talk during

G20 summit in early December, resulting in90-day suspension of all measures from both sides.

Result from the US mid-term elections held in early November showed that, Donald Trump’s Republican party still retained control of the

senate. However, Democrats took control of the House of representatives after won the vote by inches (Democrats 218: 198 Republican).

Thailand’ s economy output indicated by Gross domestic product (GDP) in 3Q18 grew by 4.3%YoY, the highest growth rate in the past

18 quarters. This prompted the Thai central bank (BOT) to upgrade annual growth rate to 3.9% from the prior forecast at 3.8%

SET INDEX SET Index

SET Index Value at Closing of 2018

Change in value from

the previous year

Highest Index Value

Lowest Index Value

Average trading value

1,563.88 points

Decreased by

190 points

(-10.8% YoY)

1,852.51

1,546.62

5.6 billion baht/day


Key events in 2018

First half of 2018: SET index headed upward to 1,813 point along the US stocks rally in the first month of 2018 until the beginning

of February when US Department of Labor published a stronger-than-anticipated numbers on nonfarm payroll employment and

hourly wages, giving concerns over investors regarding acceleration of FED to increase the rate in an upcoming FOMC meeting. In a

consequence, Dow dropped 666 points on Friday of 2nd February, extending a loss session to Monday of 5th February when the index

fell 1,175 points together with SET index which contracted more than 40 points during the same period. SET index started to recover

gradually along satisfied corporate earnings announced in late February. The Thai gauge experienced a sideway move until a heavy

selloff on 4th April after Trump declared a trade war with China via imported tariffs for goods worth of US$50 billion. The market turmoil

still went on as disappointed 1Q18 earnings for Thai corporates announced (grew at 3%YoY vs market anticipation at 10%YoY). Both

factors pressured SET index down to close at 1,585 points, erasing all gains from the rally since the end of September 2017.

Second half of 2018: SET index fell off to test the trough in the past 1 year at 16x trailing PE, luring investors to take long position

in SET while waiting for 2Q18 earnings results to be published. Banking sector’s earnings announced first while beating most of an

analyst estimates, leed to heavy inflow of funds to push SET more than 100 points before other sectors announce their quarterly earnings.

SET100 performed well, grabbing a solid 13%YoY growth in bottom-line. However, 6M18 results remained tame as its under consensus

estimates at +5.6% (Consensus +8%YoY). SET index fluctuated in narrow border during month of August until the Thai government

gazette published by Royal endorsement on 12th September unveiling that, there will be the election day by 150 days or by 19th May

of 2019. SET index rose more than 100 points to around 1,750 before moved on a sideway pace, waiting for 3Q18 to be announced.

3Q18 earnings did not make any positive surprises to investors as it met estimates at +10%YoY growth rate both on quarterly and

9M19 basis. Few days after that, ministry of commerce published export data for the month of September, a YoY contraction of 5.2%,

opposing prior forecast at 5% expansion. This factor trimmed SET index down before testing the main resistance at 1,600 points in

late November. Silver-lining seemed to shine off again after meeting between Trump and Xi Jinping during G20 meeting held in 30th

November as they arrived with the deal of 90-day suspension for bilateral imported-tariffs, surging SET index up for just 1 trading day

before it fell off and beached the resistance level below 1,600 points over the concern of China’s manufacturing activities as PMIfell on

three consecutive quarters. Rapid fall in crude oil price to around US$50/barrel is another major factor that pressured down SET index

to close at the bottom of the year at 1,563 mark.

Foreign investors are the key contributor for an annual drop in SET index as they held a net-sell position at 287 billion baht. Domestic

institutions and retail investors held a net-buy positions at 184 billion baht and 18 billion baht respectively. Meanwhile, proprietary

trading or brokerage accounts held a net-sell position of 15 billion baht. Furthermore, there were only seven new listed company in 2018,

compared to 38 stocks in 2017. This partially due to high volatility of overall stock markets and mild slowdown for domestic economic

activities in 2H18.


Investors’ total trading values per year and per month in 2018

Key indicators

YEAR INSTITUTIONAL

INVESTORS

PROPRIETARY

TRADING

FOREIGN

INVESTORS

LOCAL

INVESTOR

MONTH

IN 2018

INSTITUTIONAL

INVESTORS

FOREIGN

INVESTORS

LOCAL

INVESTOR

PROPRIETARY

TRADING

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

(12,757)

3,764

45,177

(2,303)

(15,200)

(29,149)

(24,302)

108,163

71,424

79,055

(8,656)

103,632

184,264

1,084

(1,601)

924

1,388

(449)

1,307

7,256

(1,723)

3,582

(6,418)

25,372

16,747

(15,270)

83,446

55,018

(162,346)

38,231

81,724

(5,119)

76,388

(193,911)

(36,584)

(154,346)

77,927

(25,755)

(-287,458)

(71,772)

(57,181)

116,246

(37,316)

(66,075)

32,962

(59,342)

87,471

(38,421)

81,709

(94,642)

(94,624)

118,465

January

February

March

April

May

June

July

August

September

October

November

December

(5,700)

(3,749)

(11,035)

(21,449)

(51,859)

(48,650)

(10,622)

(-10,418)

(7,756)

(7,296)

(13,992)

(292)

5,430

834

9,812

15551

3,515

22,175

34,095

12,611

23,284

23,284

14,676

5,671

(5,115)

45,164

(1,278)

7,234

(27,464)

40,808

(17,798)

(6,835)

(16,496)

(377)

(2,035)

2,532

5,384

(4,616)

2501

(1,336)

1,227

(1,263)

(5,674)

4,642

7,298

2,151

1,351

(7,911)

2018 2017 2016 2015 2014

GDP Growth (%YoY)

Market Capitalization (Btm)

Market Turnover (Btm)

Number of registered companies

Newly registered companies

Average daily trading (SET)

Index at Closing Time (High)

Index at Closing Time (Low)

Price-earnings ratio (P/E Ratio)

Dividend Yield (%)

4.2%(F)

16,493,767

10,679,263

544

7

57,209

1,830

1,563

15.24

3.12

3.9%

17,587,433

11,652,311

538

22

47,755

1,753

1,535

19.06

2.70

3.2%

15,079,272

12,259,772

522

11

50,245

1,558

1,220

18.55

3.04

2.8%

12,282,755

9,997,372

517

23

41,141

1,616

1,262

22.57

3.36

0.8%

13,856,283

10,193,179

502

17

41,604

1,600

1,224

17.81

2.94

Securities trading business outlook in 2019

Nowadays, the securities trading industry especially retail investor business unit still confronting with high intensity of competition,

client’s bargaining power to lower commission fee down, frequent rotation for marketing officers (brokers) and number of ongoing

technologies that could disrupted the industry. As a consequence, some of the firms reduce exposure or ceasing expansion in retail

business unit. In order to alleviate such an impacts, the securities firms should adapt their strategies and services toward more on

portfolio management for corporates sector, private wealth management, new investment products that relating to derivative warrants,

private funds, equity link note and etc.


RISK MANAGEMENT AND RISK FACTORS04

4.1 Risk Management Overview

The Company recognizes the importance of risk management by establishing means of managing risk that comply with laws and

regulations that promote growth and long-term success. Risk management also includes in any sectors where the Company has made

investments and considers risk management as part of the Organization’s culture through setting policies regarding acceptable levels of

risk (risk appetite) and management guidelines, risk at the Board level, Risk Management Committees, and a Risk Management Division.

Risk management is regulated by the Company’s Board of Directors in order to ensure that risk levels are appropriate for business

operations according to its risk management policy. The Risk Management Committee was assigned to set up a risk appetite level.

The Risk Management Department analyzes, identifies, assesses, monitors, and reports risks to the Risk Management Committee and

the Board of Directors on a regular basis.

4.2 Risk Management Overview

The Company, having established a business structure in which most income comes from being a holding company, recognizes that

risk can impact operations and its Subsidiaries, and seeks to assess, take preventive measures, and reduce risk by:

• Risk from operating as a holding company

The Company has invested in two subsidiaries Company (Country Group Securities PCL and Genki Power Co.,Ltd) and three

Associated Companies (MFC Asset Management PCL, Padaeng Industry PCL, and Country Group Development PCL). According

to the Company’s financial statements, the Company acknowledges profits from the Subsidiary and dividends based on the shares

held in the Associated Companies. Thus, the results of the operations of both the Subsidiary and Associated Companies directly

impact the Company’s profits and dividends.

The Board set the Company’s investment policy for selecting companies for future investment. The Company will invest in companies

with the capacity for providing suitable returns with acceptable risk appetites and providing opportunities for future growth.

• Risk from operating in the investment

The Company’s investment risk is that such an investment may not generate the return as expected. Given that the Company

is aware of such risks, an IC was appointed to determine the proper investment policy and strategy. The IC was responsible for

implementing a proper investment policy along with current situation. The Risk Management Committee will set and review risk

management policy and procedure to fit with the Company’s strategy and current situation. Not only this will help to ensure that the

Company gets the maximum return on investment with proper risk taking, but also to ensure that the Company is acting in

accordance with the regulations and frameworks set up by the Board of Directors.

• Risk from competition in the securities industry

The Securities Business’ main source of income relies on the brokerage fee, which is based on the trading volume. Since the

brokerage commission fee was liberalized in 2010, the Company has faced competition in various areas. Apart from the commission

fee, the Company faces competition in retail branch expansions, the entrance of new Securities firms, new customer service

campaigns, and so on. It is imperative that the Company adapts its strategy to recruit high-caliber human resources, expand

the customer base, stimulate higher trading volumes, and develop the infrastructure for information technology.


CGS must proceed with the restructuring of its business, which emphasizes developing information technology, reducing its

dependency on income from retailed securities trading, expanding its customer base, and paying close attention to businesses

that will serve as primary sources of profit. For example, domestic and foreign institutional businesses, proprietary trading, bonds,

single stock futures (Block Trade), private funds and Derivatives sale license, which the Company has been licensed by the

Securities and Exchange Commission (SEC) to establish a Derivatives sale business by the end of 2018. These businesses would

enable it to sufficiently contend within the highly competitive business environment both in the present day and in the future.

The Company has a policy of improving the quality of its personnel and developing its working process in order to reduce the risks of

the Securities business through the following means:

- Recruiting high-caliber human resources: The Company focuses on recruiting only veterans of Securities and similar industries.

- Expanding the customer base and stimulate higher trading volume: The Company: a) Develops its marketers’ capabilities

through numerous seminars and trainings. This training happens continuously throughout the year, particularly when the SET

launches new products and services. b) Ensures constant communication between management and our marketers about any

changes in our industry. c) Increase the quality of analyst reports to answer client demands.

- Developing strong information technology infrastructure: The Company continuously updates its information technology

infrastructure to be up-to-date and be capable of meeting customer demand.

• Risk from defaults

As of December 31, 2018, the Company has business receivables total 388.08 million baht. However, the Company has already

reserved a contingency fund (“allowance for doubtful accounts”) amounting to total receivables fewer collateral values in the

case of default. The Company currently has a policy of reducing the risks of defaults from Securities payments and from additional

placing a collateral. The policy stresses screening clients and limiting their credit lines used for trading Equities and Derivatives.

As part of the process, the Company evaluates a client’s financial standing, solvency, liquidity, and investment experience. A client’s

financial standing and credit limit are also reviewed on a regular basis in strict adherence to the policy.

In cases where defaults occur, clients will be prohibited from any additional purchases of Securities until the receivables are fully

paid. Both Marketing and Settlement officers are responsible for following up with the client. If the receivables are not paid in full

within the given timeframe, the Legal Department would have to take the necessary legal actions.

• Risk from clients switching out

Most of the Company’s client base comes from retail, corporations, and institutions (both local and from abroad). As of December 31,

2018, the Company has a total of 56,068 accounts, of which 9,904 accounts were actively traded. The total brokerage fee contributed

to 58.44 percent of the Company’s total income. Realizing the importance of the Brokerage business, the Company has implemented

the strategic initiatives mentioned in Section 3 (“Risk from Competition in the Securities Industry”) to minimize the risk of our clients

switching out.

• Risk from Depending Upon Major Clients or a Limited Number of Clients

In 2017 and 2018, the Company’s top ten major clients amounted to 45.58 percent and 43.10 of the Company’s total securities

trading value respectively. Losing such clients would impact its income as fees from the clients’ securities. However, with the

recognition of the risk of depending on major clients, the Securities Company is adjusting its business structure by focusing on

income from investment banking, domestic and international institutional businesses, proprietary trading by companies, bonds,

as well as private funds for the purpose of helping it survive a highly competitive business environment in the present day and

down the line.


• Risk from Human Resources

In a Securities business, having good employees is one of the key factors to success. Good employees that possess valuable skill

sets such as deep knowledge of investment, experience, and expertise are very hard to find. In a competitive securities business,

companies are aggressive in headhunting from their competitors. Such direct recruitment is a major threat to the Company’s income.

As the Company recognizes the importance of its employees, we emphasize on building strong employee training and development

programs and a competitive compensation and benefits package.

• Risk from investments in securities

There is the risk that the Company could not be able to achieve the returns as expected. Thus, it assigned an Investment Committee

to establish clear guidelines, investment ratios, regulations, and procedures for handling investments in equities and derivatives. The

guideline will focus on investing in securities that have low risk with a strong fundamental and adapting the investment strategy to fit

with economic situation. The Risk Management Committee sets a risk management policy so risk management department can assess

and control market risks. The market risk limits are open position limits, stop loss limits, sensitivity limits, and Value at Risk (VaR).

• Risk from Underwriting Business

In the investment banking operations of distributing and underwriting securities, the Securities Company faces the risk of being

unable to sell all of the underwriting securities. This can be due to uncertainty on the part of investors, fluctuations in the money market

or stock market, or from underwriting securities at inappropriate prices and quantities. This forces the Company to put the rest of the

securities into its own accounts and accept the losses. In order to reduce this risk, the first consideration is that the Securities Company

meticulously assesses information about companies that issue securities and investor interest in securities. The Underwriting Committee

was set up to assess and approve operations for distributing and underwriting securities.

• Risk from margin loans

The Securities Company has established operating guidelines for controlling the risk of margin loans. In order to grant credit lines to

clients, the amounts must be appropriate given the client’s financial status and ability to repay debts. The credit limit must also be

reviewed periodically to assess whether any adjustments are necessary.

The Securities Company has established a Credit Committee that meets at least once a month. They also set policies on the placement

of marginable securities, as well as the enforcement of call margins and force margins. Policies are strictly enforced in order to prevent

any damages that might be incurred upon the Company and clients.

On December 31, 2018, the Company’s receivables account (money lent out to clients for the purpose of purchasing securities)

amounted to 522.24 million baht, a increase of 43.96 percent from the year before. The increase was caused from the increase

of customers.

• Risk from Derivatives Brokerage Business

The risks of the Securities Company serving as a derivatives broker have been caused from insufficiency of clients’ collateral from

market change, mitigating this risk involves screening clients with the purpose of looking for those who are knowledgeable, experienced,

and in good financial standing. In addition, clients should place cash deposits prior to open position of any derivatives. The Securities

Company ensures that clients’ trading activities, account balances, and credit limits are frequently reviewed. Strict control is also kept

over clients’ collateral (in regard to whether it is sufficient) to avoid suffering major losses in clients’ accounts. Should clients fail to

comply with the Securities Company’s regulations, the contract will be forced closed of the derivatives in the market.


• Risk from Block Trade Business

Recently, clients use single stock futures in derivatives market instead of buy and sell in stock market due to leverage and less

commission fees. However, the Securities Company are closely monitoring of block trading clients to prevent from insufficiency of

clients’ collateral. Moreover, the Securities Company are monitoring and controlling the risk of own accounts that receive position from

the block trading clients.

• Risk from Private Fund Management Business

At present, the fund managers have expanded their customer base and continued to open new accounts. Some of these accounts have

also undergone proper investment under the fund managers. However, the management for private funds is subject to the standards

of the private fund management policies, methods, and risk management procedures, which have been approved by the Company’s

Board of Directors and the Risk Management Committee. The SEC has requested interviews and inspections of the establishing of the

private fund management business prior to allowing actual business operations.

• Risk of business impacts from crises

The Company emphasizes on managing risks from crises such as natural disasters, riots, and other shocks. In such cases, the Company

has already created preventive and safety plan with the annual review of the contingency plans annually. In addition, the Company has been

insured for a variety of crises, including natural disasters, with the total insured value worth 146.00 million baht, on 31th December 2018.


SHAREHOLDING STRUCTURE 05

5.1 Company’s share

As of December 31, 2018

A registered capital: 6,143,905,902 shares

A paid-up capital: 4,336,906,384 shares

Other capital none

Market of warrant Stock Exchange of Thailand

Symbol CGH

The shares of the Company held by Thai NVDR is approximately at 1.59 percent and held by foreigners is approximately at 15.25

percent of the Company’s issues shares and paid-up capital.

5.2 Shareholders

The Company The top ten major shareholders as of December 31, 2018 were as follows:

As of March 30, 2018, the Company had free float of 48.30 percent

NO. NO. OF SHARES %NAME

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

604,490,326

451,400,000

284,862,100

241,907,822

215,617,414

209,449,954

153,061,800

125,000,000

120,978,100

89,265,200

1,840,873,668

13.94

10.41

6.57

5.58

4.97

4.83

3.53

2.88

2.79

2.06

42.44

Mr. Sadawut Taechaubol

Mr. Pijit Viriyamettakul

LGT BANK (SINGAPORE) LTD

Mr. Samroeng Manoonphol

Mr. Tommy Taechaubol

Mr. Ben Taechaubol

Country Group Development PCL

Ms. Atjima Pakanam

UOB KAY HIAN (HONG KONG) LIMITED – Client Account

STATE STREET BANK EUROPE LIMITED

Others


The Securities Company The top ten major shareholders as of December 31, 2018 were as follows:

NO. NO. OF SHARES %NAME

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

2,571,992,475

3,983,408

1,580,087

1,015,178

837,790

642,553

494,271

437,171

308,918

250,224

8,201,409

99.32

0.15

0.06

0.04

0.03

0.02

0.02

0.02

0.01

0.01

0.32

Country Group Holdings PCL

Thai Fuji Securities Company limited

Mr. Somchai Mimungkong

Ms. Phenprapha Changthep

Mr. Pai, Wen-Cheng

Mr. Worapong Jaimongkonprasert

Mr. Lin, Wen-Ye

Thanathai Securities Company limited

HSBC BANK PLC-HSBC BROKING SECURITIES (ASIA) LIMITED

Mr. Sumit Petcharaphirat

Others

5.3 Other issuance of securities

In 2018, the Company approved of issuing new shares and offering them in order to increase its capital.

• Warrants to Purchase Ordinary Shares No. 3 (CGH-W3)

The 2018 Annual General Meeting held on April 27, 2018 approved the issuance and offering of the warrants to purchase ordinary

shares of the Company No. 3 (“Warrants No. 3”or “CGH-W3”) not exceeding 1,445,634,658 units to existing shareholders on a pro

rata basis to their respective shareholdings, at no cost, at the allocation ratio of 3 existing ordinary shares per 1 unit of Warrants No. 3.

The details of the warrants are set out as follows:


TYPE OF WARRANT

Number of warrants issued

Number of ordinary shares reserved to accommodate the exercising of the warrant

Offer Price per unit

Term of the warrant

Issuance Date

Exercise Ratio

Exercise Price

Exercise Date

Transfer Restrictions

Secondary Market of WarrantRegistrar

Not exceeding 1,445,634,658 units

1,445,634,658 shares at the par value of 1 baht per share

0 baht per unit

3 years from the issuance and offering date

May 31, 2018

One unit of Warrants shall be entitled to purchase

one ordinary share, unless the exercise ratio is adjusted under the conditions of the rights adjustment.

2.00 baht per share, unless the exercise price is adjusted as a result of a rights adjustment.

Warrant No. 3 holders shall be entitled to exercise their rights under Warrant 3 to purchase the Company’s ordinary shares on the last business day every six months. The first exercise date will be on November 30, 2018 and the last exercise date will be on May 28, 2021.

None

The Stock Exchange of Thailand

Thailand Securities Depository Company Limited (TSD)

IN NAMED CERTIFICATE A

ND TRANSFERABLE

5.4 Dividend Policy

CGH and its Subsidiaries’ dividend payment policy dictates that the dividends being paid to shareholders must not be less than

60 percent of annual net profit. However, consideration for dividend payment stakes other factors into account such as results

of operations, the financial status of the Company, liquidity, expansion of business, and other factors relating to the management of

the Company. Each dividend payment is required to obtain approval from the Board of Directors and shareholders.


MANAGEMENT STRUCTURE 06

Marketing Communicationand Public Relations Department

Human ResourcesDepartment

General Administration Department

Information TechnologyDepartment

Investment Division

Finance & AccountingDivision

Corporate Strategy Division

Internal Audit Division

Board of Directors

Risk Management Division

Board of Directors Secretary & Legal Division

Nomination & Remuneration

Corporate Governance Committee

Audit Committee

Risk Management Committee

Investment Committee

CEO

Compliance Division

Investment Department

FinanceDepartment

Investor RelationsDepartment

AccountingDepartment


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6.1 Board of Directors and Sub-Committees

• Board of Directors

The Company

As of December 31, 2018, the Company has 9 directors comprised of a mix of 2 directors who is from management and 7 who are not,

of which there are 4 independent directors as follows:

Authorized Directors

Mr. Sadawut Taechaubol may sign with the Company’s seal affixed or Tommy Taechaubol and Dr. Veeraphat Phetcharakupt may

cosign with the Company’s seal affixed.

• Audit Committee

As at December 31, 2018, there are total of three Audit Committees, of which are 3 independent directors as follows:

NAME POSITION

Chairperson

Vice Chairperson

Chief Executive Officer and Director

Independent Director



Director

Director


1. Mr. Sadawut Taechaubol

2. Mr. Surabhon Kwunchaithunya

3. Mr. Tommy Taechaubol

4. Mr. Dej Namsirikul

5. Pol.Gen. Werapong Chuenpagdee

6. Mr. Nipon Wisityuthasart

7. Mr. Pisuth Viriyamettakul

8. Dr.. Veeraphat Phetcharakupt

9. Mrs. Jitmanee Suwannapool

NAME POSITION

Chairperson

Committee

Committee



3. Pol. Gen. Werapong Chuenpagdee


• Nomination and Remuneration Committee

As of December 31, 2018, there are total of 3 Nomination and Remuneration Committees, which have 3 independent directors as follows:

• Risk Management Committee

As of December 31, 2018, there are total of 3 Risk Management Committees:

• Good Corporate Governance Committee

As of December 31, 2018, there are total of 3 Good Corporate Governance Committees, on which are 2 independent directors:

• Investment Committee

As of December 31, 2018, there are total of 3 Investment Committees:

NAME

NAME

NAME

NAME

POSITION

POSITION

POSITION

POSITION

Chairperson

Committee

Committee

Chairperson

Committee

Committee

Chairperson

Committee

Committee

Chairperson

Committee

Committee





2. Mr. Kaweewat Pothanun

3. Mr. Asawin Wongweerawit



3. Mr. Pitakphol Rungrojsuwan





• The Board of Directors meeting

The Board of Directors of the Company shall have regular meetings every 3 months and may have special extra meetings

as necessary. In order to conduct a Board of Directors’ meeting and vote in it, the Company requires a quorum of two-thirds of

directors to participate. The schedules for Board of Directors’ meetings and sub-committees’ meetings for the whole year are

defined in advance, and there shall be messages calling for meetings with their agendas at least 5 working days in advance so

participants may prepare accordingly.

In addition, Non-Managing Directors, Independent Directors, and the Audit Committee can conduct meetings among themselves

as appropriate to discuss issues related to the management of the Company without involvement of the Company’s executives.

In 2018, there were 9 meetings of the Board of Directors and Sub-Committee meetings. Also, there were 4 of Audit Committee

meeting, 2 of Nomination and Remuneration Committee meetings, 7 of Investment Committee meetings, 2 of corporate Governance

Committee meeting and 4 of Risk Management Committee meetings. The details for the meetings are as follows:

NAME – SURNAME

1. Mr. Sadawut Taechaubol




5. Pol.Gen. Werapong Chuenpagdee


7. Mr. Pisuth Virayamettakul

8. Dr. Veeraphat Phetcharakupt


9/9

9/9

9/9

7/9

9/9

9/9

9/9

9/9

8/9

4/4

4/4

4/4

7/7

7/7

2/2

2/2

2/2

2/2

2/2

4/4

NO. OF ATTENDANCE / NO. OF ALL MEETINGS (TIMES)

BOARD OF DIRECTORS

AUDIT COMMITTEE

NOMINATION AND

REMUNERATION COMMITTEE

INVESTMENT COMMITTEE

GOOD CORPORATE

GOVER-NANCE

RISK MANAGEMENT COMMITTEES


6.2 The Securities Company

• Board of Directors

As of December 31, 2018, the CGS’s structure consisted of 7 directors as follows:

NAME

NAME

POSITION

Chairperson

Independent Director and Chairperson of Audit Committee

Independent Director and Audit Committee

Independent Director and Audit Committee


Director and Chief Executive Officer

Director


2. ACM. Permkiat Lavanamal*

3. Mr. Vasu Chewprecha

4. Mr. Pat Jungkankul**

5. Mr. Procham Anranyakananda***

6. Dr.. Veeraphat Phetcharakupt

7. Mr. Thanachote Rungsitivat

Note: * Was appointed, effective February 1, 2018 **Was appointed, effective January 23, 2018 ***Was appointed, effective February 1, 2018


2. ACM Permkiat Lavanamal

3. Mr. Vasu Chewprecha

4. Mr. Pat Jungkankul

5. Mr. Porcham Aranyakananda



8/8

5/6

8/8

6/7

6/6

8/8

8/8

• Authorized Directors

Either Mr. Surabhon Kwunchaithunya, Dr.Veeraphat Phetcharakupt and Mr. Thanachote Rungsitivat, two directors can cosign with the

CGS’s Company seal affixed.

• Board of Directors’ meetings

In 2018, there were the meetings of the Board of Directors. The details of the meetings amount are as follows:

POSITION


6.3 Management

• The Company

As of December 31, 2018, the Management of the Company consists of the 6 following members:

NAME

NAME

POSITION

POSITION

Chief Executive Officer

Vice President of Corporate Strategy

Vice President of Investment

Vice President of BOD Secretary and Legal

Vice President of Human Resources

Head of Finance and Accounting

Chief Executive Officer

Managing Director of Fixed Income Business Division

Managing Director of Fixed Income Business Division

Managing Director Investment Banking Division 1

Managing Director Brokerage Retail Division 12

Managing Director of Investment management Division

Managing Director Derivatives Business Division

Vice Managing Director of Accounting and Finance Division


2. Mr. Annop Kettratad


4. Mr. Pitakphol Roongrojsuwan

5. Ms. Nataporn Ratanachumnong

6. Mr. Voradej Suruchugul


2. Mr. Chamras Kuanha

3. Mr. Sumritchai Thangharat

4. Mr. Preechavut Khumsab

5.. Mr. Tanapatra Boontarapong

6. Ms. Nattcharinphon Jesadapisit

7. Mr. Ekkhapon Siripun

8. Ms. Netchanok Anawan

• The Securities Company

As of December 31, 2018, Management of the Securities Company consists of the following 9 members:


6.4 Company Secretary

• The Company

The Nomination and Remuneration Committee has the duty of making propositions to the Board of Directors so that they may set criteria

for evaluating the performance of Directors and Executives.

Name Mr. Pitakphol Roongrojsuwan (27 years old)

% Shareholding None

Family Relationship None

Education Bachelor Degree of law, Thammasat University

Experience 2017 – Present Vice President of BOD Secretary and Legal Division, Country Group Holdings PCL

2015 – 2017 Manager of Legal Department, Country Group Securities PCL.

2014– 2015 Assistant Company Secretary, Burirum Sugar PCL.

2013 – 2014 Lawyer, Bangkok Insurance PCL.

6.5 Remuneration for Directors and Management

• The Company

The Nomination and Remuneration Committee has the duty of making propositions to the Board of Directors so that they may set criteria

for evaluating the performance of Directors and Executives.

• Remuneration for Directors

The 2018 Annual General Meeting held on April 27, 2018 approved of an increase in remunerations for the Board of Directors from the

2017 rates, while Sub-Committee remuneration rates remained the same as the previous year, with these policies becoming effective

as of May 2018. It was decided that the Chairperson and directors would be paid at the same rate as the Audit Committee and the

allowance was paid during months of the meetings and to the directors attending the Company’s meetings at the following rates:

POSITION REMUNERATION OF THE BOD (BAHT /MONTH) 2018

100,000

55,000

45,000

30,000

20,000

30,000

20,000

Chairperson

Vice Chairperson

Director

Chairperson of Audit Committee

Member of Audit Committee

Other sub-committees

- Chairperson

- Directors


• The criteria for remuneration were as follows:

- In regards to the Company’s remuneration for the Board of Directors, Audit Committee, and other Sub-Committees, compensation

is paid monthly and only during months of the meetings, and even then only to committee members who attend the meetings.

- Management who are part of the Board of Directors will receive compensation at rates similar to that for other Directors, while

management who are members of Sub-Committees will not receive such compensation.

- Those above criteria were effective on May 2018 after the approval of the 2017 Annual General Meeting.

• Criteria for Director and Committee remuneration:

- Remuneration would be paid to each committee no more than 4 times of themonthly compensation. Moreover, the

Chairperson of each sub-committee, including the Audit Committee, the Investment Committee, the Nomination and

Remuneration Committee, the Risk Management Committee, and the Good Corporate Governance Committee would

receive 1 time of the compensation.

- Each committee member’s compensation was based on their attendance at 2018 meetings:

- Directors with attendance rates exceeding 75 percent will receive 100 percent of calculated remuneration.

- Directors with attendance rates up to or less than 75 percent will receive 50 percent of calculated remuneration.

- Directors entitled to receive remuneration must fulfill their duties throughout the 2018 business year (from January

1-December 31, 2018).

Details of remuneration payments in 2018 are as follows:

NAME – SURNAME

MEETING ALLOWANCES

BOARD OF DIRECTORS

(BAHT)

AUDIT COMMITTEE

(BAHT)

NOMINATION AND

REMUNERATION COMMITTEE

(BAHT)

INVESTMENT COMMITTEE

(BAHT)

GOOD CORPORATE

GOVERNANCE COMMITTEE

(BAHT)

RISK MANAGEMENT

COMMITTEE

(BAHT)

Mr. Sadawut Taechaubol

Mr. Surabhon Kwunchaithunya

Mr. Tommy Taechaubol

Mr. Dej Namsirikul

Pol. Gen. Werapong Chuenpagdee

Mr. Nipon Wisityuthasart

Mr. Pisuth Viriyamettakul

Dr. Veeraphat Phetcharakupt

Mrs. Jitmanee Suwannapool

Total

PENSION

(BAHT)

TOTAL

(BAHT)

700,000.00

385,000.00

315,000.00

315,000.00

315,000.00

315,000.00

315,000.00

315,000.00

315,000.00

3,290,000.00

-

-

-

-

80,000.00

120,000.00

-

-

80,000.00

280,000.00

-

-

-

60,000.00

40,000.00

40,000.00

-

-

-

140,000.00

-

180,000.00

-

-

-

-

-

-

-

180,000.00

-

-

-

20,000.00

30,000.00

-

-

-

-

50,000.00

-

120,000.00

-

-

-

-

-

-

-

120,000.00

400,000.00

275,000.00

180,000.00

225,000.00

225,000.00

225,000.00

180,000.00

180,000.00

180,000.00

2,070,000.00

1,100,000.00

960,000.00

495,000.00

620,000.00

690,000.00

700,000.00

495,000.00

495,000.00

575,000.00

6,130,000.00


6.6 Remuneration for Directors and Management

• Remuneration

The Company has criteria for remuneration payment to Management by considering knowledge, capability, experience, and previous

performance, as well as comparisons with other companies in the same industry. 6 Remuneration of Managements for the year 2018

consisted of salaries, bonuses, and other remunerations to the total of 30.21 million baht.

• Other Remuneration

The Company established a provident fund during the year 2018, contributing a provident fund for 6 managements totaling 1.29 million

baht, which were calculated using percentage of salary as follows:

The Securities Company

Directors Remuneration

WORKING PERIOD PERCENTAGE OF SARARY

4

6

8

Not over 3 years

Over 3 years but not over 6 years

6 years and up

NAME


2. ACM. Permkiat Lavanamal*

3. Mr. Wasu Chewpreecha

4. Mr. Pat Jungkankul**

5. Mr. Porcham Aranyakananda***


7. Mr. Thanachote Rungsititvat

8. Mr. Hong Chye Sim****

9. Pol. Gen. Somchai Vanichsenee*****

Noted: *Appointed ACM. Permkiat Lavanamal as a member of the Board, effective 1 February 2018 **Appointed Mr. Pat Jungkanku as a member of the Board, effective 23 January 2018 *** Appointed Mr. Porcham Aranyakananda as a member of the Board, effective 1 February 2018 **** Vacated from position due to pass away on 6 December 2018 ***** Resigned from position with effective date on 1 February 2018

BOD’S REMUNERATION (MILLION BAHT)

1.40

0.61

0.52

0.48

0.36

0.40

0.40

0.24

0.10


Remuneration for Directors and Management

• Remuneration for Directors and Management

In 2019, the remunerations for 3 directors and 9 directors paid as salaries, bonuses, and other remuneration (excluding meeting

allowances mentioned above.) amounted to 37.78 million baht.

• Other remuneration of executives

The company has set up a Provident Fund. The company has support 3-5 percent of Management’s salary to the provident fund.

In 2019, the Company contributed around 1.42 million baht to the provident fund.

In the resolution of Board Meeting Number 18/2002 on October 22, 2002, a provident fund was agreed upon that was then registered

according to the Provident Reserve Funds Act B.E. 2530 (1987) and the Amendment Act B.E. 2542 (1999). The Company’s Provident

Fund was officially established on December 25, 2002 and On July 1, 2009, the Company assigned MFC Asset Management, which

manages and registered the Provident Fund under the name “MFC Master Fund.” This fund is categorized as a Master Pooled Fund.

According to the Fund’s regulations under the approval of the Board’s Resolution Number 18/2002, the Company shall contribute

to the Fund with an amount equivalent to its staff’s contributions, and each staff shall contribute to the Fund the amount calculated

on the percentage of salary as follows:

WORKING PERIOD PERCENTAGE OF SALARY

3

4

5

Not over 3 years

Over 3 years but not over 5

Over 5 years


6.7 Personnel

• Number of employees

As of December 31, 2018, the Company and its subsidiaries had the following numbers of employees and forms of compensation

between 2017 – 2018:

• Significant changes in the number of employees in the past 1 year

- As of December 31, 2018, the Company’s the number of employees increased by 3 employees from 2017 in the Investment

Division which was not a significant change.

- As of December 31, 2018, The Securities Company’s the number of employees increased by 86 employees from 2017.

• Serious labor disputes in the past three years

- none –

• Staff development policy

The Human Resource Department organized internal trainings and sent some employees participated external training to improve their

working abilities and skills. Furthermore, the Company promoted the employees work morally, honestly, and integrality. Staff also must

keep information about their Employers confidential.

DIVISIONSNUMBER OF EMPLOYEES

2018 2017

1. Management Division

2. Corporate Strategy Division

3. Investment Division

4. Company Secretary and Legal Division

5. Internal Audit and Compliance Division

6. Financial and Accounting Division

7. Subsidiaries’ employees

Total

Compensation (MB)

4

4

15

2

-

2

345

372

524

4

4

12

2

-

2

259

283

303


CORPORATE GOVERNANCE07

7.1 Corporate Governance Policy

The Board of Directors recognize the significance of good corporate governance which one of is the crucial factor for business

to operations with effective management systems. Good corporate governance is also the foundation of businesses’ sustainable growth

for the long-term benefit of shareholders. Thus, the Board of Directors encourages and promotes the continuation of good governance

system for all business units and their staffs whom covers the principles of integrity, transparency, being auditable, avoidance of conflicts of

interest, timely information disclosures, and accuracy. The good governance system also includes being cautious and maintaining

the equality of the interest of customers, shareholders and all stakeholders and promoting social responsibility. The policy on

Corporate Governance of the Company is disclosed via various channels including the annual report, the 56-1 form, and the

Company’s website at http://www.cgholdings.co.th/. As a result, information is easily accessible for all stakeholders. The Company’s

Corporate Governance Policy consists of the following:

1. Rights of Shareholders

• The Board oversees and ensures that every shareholder has the following basic rights:

- To receive or transfer shares unless the transfer causes the Company to exceed the number of Non-Thai shareholders quota of

49 percent of total number of shares outstanding.

- To obtain accurate, complete, and timely information.

- To propose, appoint, or remove directors and to approve the appointment of independent auditors.

- To make decisions on changes in the Company’s important policies.

- To obtain profits from operations.

- To attend meetings and to vote in shareholders’ meetings as follows:

• Nominating, appointing, or removing directors

• Appointing auditors

• Appropriating dividend payments

• Issuing or amending regulations or articles of association

• Decreasing or increasing registered capital

• Approving extraordinary agendas

• Other matters that affect the Company in accordance with the law

• Shareholders shall be delivered an invitation for the Annual General Meeting with adequate information specifying the date, time,

venue, and agenda including proxy forms and the details of the step to appoint a representative by nominating at least one

independent director to be his/her attorney as well as information relating to the matter to be decided at the meeting in advance.

• The Company shall arrange Shareholders’ Meetings at appropriate times and locations to facilitate the maximum number of

shareholders to be able to attend the meeting. Furthermore, the Company will use IT systems to expedite the registration process

and provide convenience to shareholders.

• The Board of Director encourages shareholders to vote by bullet for all agendas, especially principal agendas such as related

transactions, acquisition or disposal of assets, and director elections.

• All Directors, especially the Chairman of the Audit Committee, are required to attend the Shareholders’ Meeting to clarify or answer

questions to shareholders.


• Shareholders shall have an opportunity to propose additional matters in the agenda or ask questions, request for clarification, and

express opinions appropriately according to the meeting agenda; the Board of Directors will not add any agendas without

notifying shareholders in advance.

• Shareholders shall be informed of the rules and regulations and voting procedures of meetings. The Company shall post all meeting

agendas on its website prior to sending documents to shareholders in order for the shareholders to have adequate time to be

prepared for the meeting, as well as providing the opportunity for shareholders to ask questions before the meeting.

• The Board’s opinions shall be provided for each agenda and the minutes of the meeting shall be recorded accurately and

completely so that shareholders and concerned persons are able to verify such information through downloads from the Company’s

website.

• In the case of multiple voting items in an agenda, there shall be a vote on each of the items within the agenda. The questions and

answers will include voting results indicating the number of shareholders who approved, disapproved, or abstained their

votes for each of the agendas will be recording, including the list of Directors and other attendees, along with any Directors

who were absent from meetings.

• All Directors and senior executives of the Company are required to disclose their relationships – both directly and

indirectly - with major shareholders or any third parties who have related transactions with the Company.

• Independent individual shall be appointed and presented to count or determine votes during Shareholders’ Meetings and to

disclose such information in meetings. This will be recorded and included in the minutes.

• The Chairman of the Meeting shall allocate time appropriately and encourage shareholders to have opportunities to express

their opinions and raise any enquiries at meetings for any matter related to the Company.

In 2018, the Company set up one Shareholders’ Meeting - the annual General Shareholders’ Meeting - at 2.00 PM at the Ball Room,

4th Floor, Bliston Suwan Parkview Hotel, 9 Soi Tonson, Ploenchit Road, Lumpini, Pathumwan, Bangkok on April 27, 2018. There were 9

directors attending the meeting included the Chairperson, the Chairperson of the Audit Committee, the Chairperson of the Nomination

and Remuneration Committee, the Chairperson of the Risk Management Committee, the Chairperson of the Investment Committee, the

Chief Executive Officer, and Management all attended the meeting. The Inspector, which consisted of the Auditor from Deloitte Touche

Tohmatsu Jaiyos Advisory Co., Ltd, was present to answer any questions. An external auditor from Deloitte Touche Tohmatsu, Mr. Wonlop

Vilaivaravith and Miss Jarunya Anantachai, and an independent external legal advisor from Weerawong, Chinnavat and Peangpanor

Ltd, Miss Chadamarn Rattanajarungporn, attended the meeting as observers and witnessed the vote count. Furthermore, to comply

with the principles of Good Corporate Governance, the Company requested that some minor shareholders serve as volunteers to act as

independent agents and neutral parties while inspecting the casting of votes. The volunteers thus participated in observing the inspection.

Before the commencement of the Annual General Shareholders’ Meeting, the Company’s Secretary clearly explained the voting

procedures and the rights of shareholders. The conference proceeded according to the agenda indicated in the meeting invitation.

During the meeting, the event’s chairperson gave all shareholders equal opportunities to ask questions of and inspect the Company’s

work, as well as to make comments and suggestions prior to the casting of votes for each item on the agenda.

After the meeting, the Company’s Secretary and the Legal Department prepared the minutes with details including the list of Directors

who attended, as well as all questions, answers, and summaries. A record of every vote was kept, along with records of who approved,

disapproved, or abstained from motions. The minutes were broadcast through the Company’s website (www.cgholdings.co.th) so that

all parties would be able to verify it.


2. Equitable Treatment of Shareholders

• The Board oversees and ensures that every shareholder is treated equally by the following:

- The Company shall delivery a shareholder meeting invitation at least 14 days in advance and provide the shareholder adequate

information specifying the date, time, place, and agenda, including concerned matters. Thus, shareholders will have an

opportunity to submit questions in advance.

- The Board shall provide an opportunity for shareholders to submit questions 7 days in advance to the shareholder meeting.

- Announcements of shareholder meetings will be posted in the newspaper for 3 consecutive days in order to inform shareholders.

- The Company will hold the shareholder meetings at dates, times, and locations that will allow shareholders to attend; and will

not make sudden changes to the meetings’ locations.

- The Board shall provide an opportunity for shareholders using power of attorney for proxy forms to pre-indicate his/her voting

direction and propose at least 3 names of independent directors for shareholders to grant their proxy.

- The Chairperson of the Board of Directors shall inform others of the rules and regulations of voting procedures, and the number

of shareholder attending the meeting to shareholders present at the meeting.

- Shareholders who are Executives shall add no agendas without informing other parties in advance.

- Each share has equal rights. The shareholders have rights to vote according to the number of shares held. In addition, they shall

have equal rights to obtain news and information about the Company.

- The Chairperson of the Board of Directors shall initiate the agenda in order as informed in the meeting invitation.

- The Chairperson of the Board of Directors shall allow the shareholders to discuss and ask questions.

- In shareholders’ meetings, all shareholders who are Executives, non-executives, and foreign shareholders shall be treated

equally and fairly.

- All shareholders who attend the meeting shall have the right to vote ‘agree’, ‘disagree’, or ‘abstain’ on each agenda.

• Supervisionoftheuseofpositionforpersonalbenefitpolicy

- In accordance with Section 59 of the Securities and Exchange Act. B.E. 2535 (1992), directors and executives are required to report

changes in securities holdings to the SEC and the SET.

- The Company’s directors, executives, and staff who relate to internal information are not allowed to disclose such information to

any outsiders or unrelated persons.

- Directors, executives, and staff members of relevant departments (as well as their spouses and underage children) are prohibited

from participating in any of the Company’s securities trading activities during the 14 days prior to the disclosure of the quarterly

and annual financial statements.

- The Company has made declarations in writing regarding the ethics of executives and staff, along with penalties for those who

violate the rules.

The Board of Directors has prepared a business ethics manual and guidelines on use of insider information in order to control the use

of insider information and preventing its use for self-interest or the wrongful benefit of others.

7.3 Conflicts of interest policy

The Company does not allow directors, executives, and staff to operate competing businesses and to make any connected transac-

tions which may lead to conflicts of interest. In the event that such transactions are required, the Board of Directors will oversee the

transactions to ensure transparency and fairness as if the Company was dealing with unrelated partners. Directors, executives, or staff

members who are stakeholders are required to inform others of such conflicts of interest prior to the consideration of such items and

to be recorded clearly in the minutes of the meeting, and are not allowed to consider and approve these transactions. Said policy has

been stipulated in the Business Ethics Manual accordance to the minutes of the Board of Directors’ Meeting Number 1/2014.

In the case that transactions are considered connected transactions under the notifications of the SEC or the SET, the directors will strictly

oversee that the transactions are strictly done in accordance with the regulations, methods, and disclosures of information concerning

connected transactions of listed companies.


7.4 Policy on connected transactions of the Company, subsidiaries, associated companies, and corresponding subsidiaries, which are divided into two parts as follows

• Measures in controlling connected transactions

The Company recognizes the importance of transparency in the transactions between the Company and its Subsidiaries and

has thus issued measures to control connected transactions of the Company, Subsidiaries, Associated Companies, and corresponding

subsidiaries with individuals who may have conflicts of interest, personal interests, or possible conflicts of interest as stipulated by

the notifications of the Securities and Exchange Commission or the Stock Exchange of Thailand. The Company’s Audit

Committee will give its views on the necessity of making such connected transactions and the appropriateness of prices by considering

various conditions in accordance with guidelines on normal trading and the arm’s length principle (ALP).

In the event of related transactions that require approval from the shareholders according to the SET’s regulations prior to carrying out

the transaction, the Company will disclose the details and reasons for the transaction to the shareholders in advance of the transaction.

In the event that the Audit Committee is unable to consider the connected transaction, the Company will seek an independent expert

or the Company’s Auditor to provide opinions on such connected transactions for further consideration by the Company’s Board

of Directors and/or Audit Committee and/or shareholders, as the case may be. Those who may have conflicts of interest or personal

interest in the connected transaction shall not be entitled to vote for the approval of the connected transaction.

In addition, the Company will disclose information about entering into connected transactions and vital asset acquisitions or disposal

of the Company and its Subsidiaries in accordance with the notifications of the SEC or the SET and the accounting standards of the

Institute of Certified Accountants and Auditors of Thailand (ICAAT).

7.5 Policy on Connected Transactions Trends

The Company, its Subsidiaries, and corresponding subsidiaries may make possible connected transactions with individuals or

entities who may have possible conflicts of interest. In the event that such transactions are normal business transactions and done using

the ALP, the Company has an internal policy specifying conditions that need to be met. The transaction needs to be in accordance

to standard market terms and must be comparable to the pricing being offered to a third party, which is in line with what the Board of

Directors approved during Meeting Number 1/2014, and in accordance to the Securities and Exchange Act and the SET. Related parties

must strictly follow a joint agreement and set a clear and fair price and terms which do not lead to transfers of benefits.

Given the restructuring process, there could be an increase in number of persons who may be classified as related parties, hence there

could be an increasing connected party transaction occurring with the Company and the securities business. Most of the connected

transactions would likely involve securities trading transactions.

Whenever there is an adjustment in prices or conditions of the connected transactions, the Internal Audit and Compliance Department

will investigate such transactions and prepare a quarterly report for the Audit Committee to consider and recommend appropriate prices

and reasons for making connected transactions. Otherwise, in other normal connected business transactions, the Company will follow

the aforesaid measures to control connected transactions.

Therefore, after CGS released from listed company in SET, the Board of Director of the Company and CGS shall oversee CGS to comply

with rules, procedure and disclosure the connected transaction as the listed company rules by mutatis mutandis. Additionally, the Article

of Association of CGS has amended inconsistent with the mentioned policy. CGS shall strictly comply with.


7.6 Roles of Stakeholders

The Board of Directors have a responsibility to protect all stakeholders’ interests that are governed by the law, which includes clients,

shareholders, investors, creditors, trading partners, independent auditors, management, civil servants, society, and other related parties

to ensure that their rights are being protected equally.

• Policy on safety and sanitation

The Company improved the working environment by expanding work spaces, reducing congestion for better working conditions, allowing

the Company’s employees to improve working performance and improve their capabilities.

In 2018, there were no workplace accidents, which resulted in zero absenteeism rate from workplace accidents. In addition, there were

also no records of work-related illnesses.

• Policy on Employee remuneration and benefits

The Company uses the KPI system in considering the compensation to each individual employee in line with their performance in

an equal and fairly manner. The Compensation Sub-Committee appointed by the Company’s Board of Directors has the overall

responsibility for considering and determining appropriate payments.

• Establishment of Employee Provident Fund

The Provident Fund (“The Fund”) is a fund set up voluntarily between the employer and employees. Assets of the fund consist of money

contributed by both employers and employees. Given that the employer is helping employees save money, this can be regarded as

a kind of benefit that helps make employees stay with the employer for a longer period of time. The Company set up a Provident Fund

for staff and a Provident Fund MFC Master Fund that was registered on June 16, 2014 by MFC.

• Policy on Human Resource Development

The Company has a committee that seeks for employees to obtain both internal and external training to enhance personnel development

and to promote honesty, ethics, and maintaining confidentiality for both the Company and its clients.

In 2018, the Company arranged several training courses both inside and outside its offices. Courses provided outside for staff included:

• Training for Directors

- Dr. Veeraphat Phetcharakupt attend anti-corruption seminars under the concept of ‘Thai awareness and combatting corruption’

(Kon Thai Tuen Roo Su Kong) arranged by the Thai Institute of Directors (IOD).

- Dr. Veeraphat Phetcharakupt attend anti-corruption seminars, “Thailand’s 9th National Conference on Collective Action against

Corruption” arranged by the Thai Institute of Directors (IOD).

• New Directors’ orientations and new staff

- orientation for new director 0 time (No new directors)

- orientation for new staff 1 time

• Staff training

- internal training sessions 3 times

• Anti-Corruption Course

Training was provided so that personnel would develop an improved understanding of good governance, morals and ethics, and

knowledge and comprehension of prevention and suppression of corruption, all so that they would be able to apply this information

to their work within the organization.


• Using resources properly course

To stimulate awareness of one’s responsibility for, knowledge of, and understanding of activities for social and environment

preservation with the intent of properly utilizing resources and applying knowledge to the organization. Furthermore, it should reduce

costs and serve as a means of controlling expenses.

• Corporate Performance Improvement course

To realize the problems and issues that the Organization has in order to achieve the goals of: improving the efficiency of individuals,

divisions, and the Company; in addition to creating understanding and cooperation so operations can move more efficiently

toward success.

• External training for the Company to staff 15 times

(Average hours (per staff) of training 10 hours per year)

Apart from this, career path development and promotions are laid out in a systematic and organized way by considering their

performance, capability, appropriateness, and impact on the Company, which help employees to find motivation to continuously engage

in self-improvement. The KPI was used to evaluate employee performance.

• Policy on Non-violation of human rights

- Supports and respects the protection of human rights, and prevents the Company’s operations from being in association with human

rights violations, including being against forced labor and child labor.

- Treats all stakeholders fairly and respectfully without discrimination as to race or ethnic origin, gender, age, skin color, religious,

body, status, or family.

The Company has set its policy as part of work regulations which was delivered to the Department of Labor Protection and Welfare as

of December 1, 2015.

• Policy on Competitor integrity and responsibility

The Company promotes fair practices and operates in accordance with the relevant regulator’s guidelines. The Company will not

try to obtain competitors’ secrets through any unethical or illegal means. Furthermore, the Company will not try to harm competitors’

reputations through any negative accusations and unfair-treatment.

• Policy on Business partner dealing

The Company shall treat its Business Partners equally according to the terms and conditions specified in contracts and not do anything

that would result in any adverse impacts to the Company’s reputation, illegal actions, or violation of intellectual property rights such as

usage of genuine software licenses while keeping in mind the need to handle business operations with fairness and ethics.

• Policy on Selection of business partners

The Company will source for quality products and services, while aiming for developing and maintaining long term relationship with

such business partners who share the same objective of providing quality products and services. The Company sources for Business

Partners that can provide products and services with the following criteria:

- Provides the same information to all business partners seeking to bid for the sales of goods and services

- Provides fair selection procedures

- Prepares proper contracts

- Provides follow-up procedures to make sure the conditions stated within contracts are being performed in order to prevent any

fraud or corruption.


• Policy on fair treatment with creditors

The Company adheres to the agreements and terms and conditions set forth in the loan contracts signed with creditors, including

contracts during the prices of goods and services in the aspect of paying the principal, interests, protecting the collateral and making

payment for such goods and services.

Moreover, the Company also manages its capital to be sufficient for its loan repayment and its liquidity to ensure the ability to repay its

loan obligation, as per repayment schedule.

• Policy and Practices for Intellectual property or copyright

- The Company must operate and ensure its employees to perform their work without violating the intellectual property law such as

trademark, patent, copyright, trade secrets and other intellectual properties.

- The Company’s employees have right to create or invent their work independently under the relevant specified law except where

such work are generated under their role within the Company or using Company’s data – of which they will be considered property of

the Company, unless the Company clearly permits that the invention belong to its employees.

- The Company supports its employees to realize the importance of intellectual property rights in workplace and in their daily life.

- Before using any data or information, the person involved will need to ensure that there is no violation of intellectual property rights.

7.7 Policy on Anti-corruption

Following the resolution of Board of Directors’ Meeting No. 5/2017, there have been changes in policy and guidelines for combating

corruption:

In order for the Company and its Subsidiary to recognize and emphasize supporting participation, taking social responsibility,

and combating corruption, which are essential foundation of CGH’s business operations under Good Governance principles for

sustainable development, the Board of Directors agreed that a policy must be established:

• Goals

This policy aims to ensure that the Company, its subsidiaries, and personnel proceed as follows:

- Stating the intentions and determination of the Company, its subsidiaries, and personnel to engage in all kinds of anti-bribery

and corruption activities.

- Establishing rules and using them as procedural guidelines for directors, management, and personnel to follow in such efforts, and

setting up measures so that no one disobeys said rules or guidelines.

- Preparing rules as procedural guidelines in the auditing and monitoring of all processes to ensure that they follow this policy.

- Encouraging personnel to be vigilant and to report any bribery or corruption through safe communication channels.

• Scope

This policy applies to the Company’s directors, management, and all other personnel.

• Definition

Corruption is defined as the offering, promising, guaranteeing, demanding, or taking of money, assets, or other benefits in manners

inappropriate for state agencies, government agencies, private agencies, or individuals, directly or indirectly causing them to act

or to refrain from performing their duties in order to obtain or maintain a business. In addition, this extends to work toward making

recommendations aimed at benefiting the Company, as well as acquiring or maintaining certain benefits that are inappropriate. This

definition may not apply in cases where local laws, rules, regulations, restrictions, traditions, or trading practices allow such activities

Bribery is defined as the offering, promising, guaranteeing, demanding, or taking of money, assets, or any inappropriate benefits as

motivation to behave in manners considered immoral, dishonest, and against the law.


Giving or taking bribes or other forms of corruption may be done in various ways including:

- Political contributions

- Charitable contributions and sponsorships

- Gifts and hospitality

Political contributions are defined as assistance, whether in terms of lending money or other types of assistance, in order to support

political activities.

• Roles and Responsibilities

- The duties and responsibilities of the Board of Directors are to establish and to approve the Anti-Bribery and Corruption

policy to support the associated system. This will help to ensure that the Company’s business operations are carried out

according to the law, rules, regulations, and good ethics. Management has recognized and emphasized the importance

of Anti-Bribery and Corruption efforts.

- The Audit and Corporate Governance Committees’ duties and responsibilities are carrying out assessments to ensure that the

Company has been properly regulated and ensuring that operations follow the Anti-Bribery and Corruption policy.

- The Chairperson, directors, management, and personnel are responsible for fully utilizing the Anti-Bribery and Corruption policy.

A system has been established in work procedures to support, encourage, and control so that all divisions will follow the policy.

- The Compliance team is responsible for auditing and assessing to guarantee that procedures are carried out properly according

to policy and the concerned laws. This is done to ensure that the Company possesses an adequate and appropriate internal

control system and reports to the Audit Committee.

- Personnel must perform their duties according to this policy. In the case of any questions or disobedience, they must report to

their supervisors or notify the Company through an established channel.

• Policy and procedural guidelines

- The Anti-Bribery and Corruption policy

Personnel of the Company and its subsidiaries are prohibited from operating, accepting, or participating in any form of bribery

or corruption, whether directly or indirectly. The Company and its subsidiaries’ business operations will be regularly reviewed

to ensure that they do not violate the policy by engaging in bribery or corruption. The directors and management are responsible

for reviewing the procedures and regulations of the policy in order to comply with changes in business, rules, regulations, and laws.

- Political contributions

Political contribution must be handled in accordance with laws regarding bribery and corruption. The Company has no policy

on supporting or providing assistance in politics and will not participate in or encourage political activity. Examples of such include

donating goods or services, advertising to support or encourage a political entity, purchasing of event tickets for fundraising,

donating to organizations with a close relationship to political parties, providing technology services with free of charge, and using

the working time spent by employees to gain a business advantage. The Company’s policy toward political assistance is as follows:

• The Company will operate its business without any prejudices, not showing any affinity for politics or any particular politicians or

political parties.

• All personnel will have complete freedom in political participation under the Constitution; however, they must not act as

employees of the Company or utilize its assets, equipment, or tools in any political activities. If they do take part in such activities,

they must proceed with caution so that there are no misunderstandings suggesting that their actions were done on behalf

of the Company, which might in turn lead to the public having misconceptions about the Company’s neutral stance on politics.

• In the event that the Company wishes to display political support, such actions must not go against any relevant laws or be done

with the expectation of certain benefits. Prior to engaging in such support, a report indicating the name of those supported and the

goal of said support, along with complete accompanying documents, must be submitted for approval by the Board of

Directors.


- Donations or contributions

Donations or contributions to good causes must be carried out with full transparency and in accordance with the law. To

ensure that the Donations or contributions will not be used as a front for bribery, the receiver’s name and donation or cause’s goal must

be clearly specified. In addition, they also must comply with the Company’s ethics, regulations, orders, or any relevant laws.

- Facilitating Payments

Payment made in exchange for convenience to state agencies for the purpose of expediting procedures is prohibited.

- Gifts,services,andotherbenefits

Giving or taking gifts, special privileges, entertainment, and other expenses or exchanged benefits are allowed and

considered as normal business practices, traditions, or fitting in the context of local festivals if there is no effects on the

Company’s business operations and no risk in bribery and corruption. This is allowed as long as they are complying with

standard business practices, ethics, regulations, orders, and relevant laws, including the conflict of interest policy set within the

Corporate Governance policy.

The CEO shall set out guidelines for giving or receiving gifts, as well as any other benefits so that all employees may be able

to follow them.

- Policy, reviewing risk assessment measures, hedging procedures, and reporting events in which the Company may be involved

in corruption

• Setting up the policies, measures, and risk prevention process in bribery and corruption reviews, as well as developing

procedures for receiving complaints and reporting bribery and performing corruption reviews once a year so that they will be

more comprehensive and effective.

• The Risk Management Department is to set up risk assessment procedures for bribery and corruption and evaluate the risks of

each, as well as report the results to the Risk Management Committee and the Board of Directors at least once every quarter.

• The Compliance and Internal Audit staff are to report any events wherein the Company may have had involvement in bribery or

corruption to the Audit Committee and the Board at least once a quarter.

- Human Resource Management

This Anti-Bribery and Corruption policy covers all human resource processes such as recruiting, training, and evaluating of work

compensation and promotion. The policy is to be used as part of the disciplinary methods of the Company’s personnel management.

The Company is to set up training courses to communicate the Anti-Bribery and Corruption policy whenever possible at the

appropriate times and occasions.

- Communication with employees and customers

The Company is to announce the Anti-Bribery and Corruption Policy to every employee and to broadcast it through different

channels:

• All personnel will receive a copy of this policy by e-mail, the Company’s internal, and external channels to ensure that they

know and understand it.

• This policy will be part of the documents newly hired employees must sign to signify their acknowledgment of the rules and

connected policies prior to assuming their positions.

• The Company will announce the policy on its website, as well as communicate it to its business associates, stakeholders,

and individuals associated with it.

In 2018, the Company arranged for all its employees to attend anti-corruption seminars under the concept of ‘Thai awareness and

combatting corruption’ (Kon Thai Tuen Roo Su Kong) to promote awareness of anti-corruption efforts and bribery for the purpose of

gaining unfair advantages in business.


- Protection for directors, executives, and other employees

The Company assures its employees that they will receive fair treatment and protection stemming from refusal of bribes or any actions

that would be considered corruption, as well as in cases where they alert the Company about incidents of bribery and corruption.

While rejections of the sort could potentially cost the Company some business opportunities, it believes that the absolute refusal to

accept bribery and its corruption policy will serve to create value for it in the long run.

If any personnel are threatened or intimidated due to their refusal to participate in what is considered bribery or corruption, they

are to immediately notify their supervisor, management, or the compliance and internal audit staff. In the event that the problem

is not rectified, they are to report through the proper channels under this policy.

- Disobeying the policy

The Company will punish any directors, members of management, or personnel who disobey these policies, including direct

supervisors for disregarding or inaction in the face of any wrongdoing or failure to acknowledge such wrongdoing with disciplinary

actions. Penalties can range up to dismissal and/or removal from a position. Furthermore, employees cannot use ignorance

(of these policies and/or any relevant laws) as an excuse for disobedience.

- Reporting clues or complaints

If directors, management, employees, or other individuals have suspicions or evidence of directors, management, personnel,

or others engaging in corruption on behalf of the Company, they must report the incident or make a complaint to the Company.

The Company will keep information regarding the individuals making the report confidential and will use this knowledge in

administration and interior operations, but may disclose it if issued orders by authorities such as courts of law, the SEC,

or other relevant regulatory bodies.

The individuals notifying the Company must do so with good intentions. If the Company finds any evidence of dishonesty

in the message or finds that it was made with malicious intent to damage, defame, or otherwise harm others, it will take the

appropriate further actions.

Directors, management, personnel, and stakeholders are able to directly submit a complaint personally or in writing through the

following channels:

• Telephone: 02-256-7999 ext. 1108

• Facsimile: 02-256-7888

• E-mail: [email protected]

• Letters indicating the sender’s first name, last name, and telephone number with the complaint, must be sent to the recipient of the

complaint at the following address:

Country Group Holdings PCL

132 Sindhorn Tower 3. 20th Floor, Wireless Road Lumpini, Pathumwan Bangkok 10330

The recipient of the complaint may be one of the following four:

• Chairperson of the Board

• Chairperson of the Audit Committee

• Chief Executive Officer

• Head of Compliance and Internal Audit


Action on Complaints

• Collecting information from the complaint to present to the Audit Committee and advise the informant of the complaint’s status.

• The Audit Committee will follow the scrutiny process in accordance with the established rules and regulations within seven days.

• Providing guidelines to the sub-committees concerned and the Board of Directors, respectively, to resolve the issue.

• If the accusation is found to be true, the Company will apply a punishment consistent with its regulations or according

to any relevant laws.

Protection for Parties Making Complaints

The receiver of complaints must keep the whistleblower’s information and details given to the Company confidential and not

disclose them to any outside parties.

In 2018 the Company did not find any significant complaints from any of its directors, executives, employees, or stakeholders.

7.8 Social responsibilities policy and practice

The Company is aware of our role in social responsibilities to the community that we are a part of and dedicate our work for social

responsivity with all stakeholders every year. The Company allocates part of its budget to support Corporate Social Responsibility (CSR)

activities with three focusing areas including education, religion, and quality of life. Additional details will be presented in the part of

‘Corporate Social Responsibility’.

• Environmental promoting and training policy

- Strictly act in accordance to the laws and requirements of the environment

- Encourage employees to learn about the environment in order to be environmental responsibilities.

- Encourage employees to use resources efficiently and effectively.

- Encourage employees to exchange environmental knowledge and experience among themselves in the Company.

- Encourage and support employees to regularly improve their working process to suit with the environment.

- The Company set environmental protection policies that will not affect the environment.

- Regularly review and evaluate the Company’s performance in environmental protection.

The Company has arranged environment-related activities, the details of which are given in the CSR Report.

In addition, the Board of Directors acknowledges the rights of stakeholders according to specified laws and encourages

cooperation between the Company and all stakeholders for sustainable growth. All stakeholders are treated equally and fairly,

and information is disclosed fair and timely manner through all channels in accordance with the SET’s procedures, as well as

the Company’s website at http://www.cgholdings.co.th. Moreover, all stakeholders can request for further information by contacting

Thanika Padungpattanapong via telephone at 0-2256-7999 ext. 1707, or e-mail at [email protected]

7.9 Disclosure and Transparency

• Information Disclosure

- Provide accurate and updated information in both English and Thai. Disclosure should transparent and consistently updated

through various channels such as the Company’s website.

- The Board of Directors or executives assign specific persons or departments to disclose information to shareholders, investors,

analysts, media, or supervision agency.


- Information which shall consistently be disclosed:

• Vision and Mission of the Company

• Nature of businesses

• Lists of the Board of Directors and Management

• Financial statements and operating performances of the present and the previous year

• Downloadable 56-1 Form and Annual Report

• Other relevant information or documents presented to analysts, fund managers, and media

• Shareholder structure, group structure, and percentage of shares held by Directors and Executives as well as lists of

major shareholders

• Invitation letters to shareholder meetings

• The memorandum of association of the Company and shareholder agreements (if any)

• Risk management policy and procedures

• Duty, qualification, and terms of Directors including subjects that needed approval from the Board of Directors, Audit Committee,

Nomination Committee, Remuneration Committee, and Good Governance Committee

• Code of ethics and practices for employees and the Board of Directors

• Investor relations contact information

- Define financial statements or financial information to present financial status and operating performance as required by law, along

with disclosing other information in a complete, accurate, sufficient, and timely manner so that all shareholders and stakeholders

are informed accordingly.

- Organize financial statements to be audited by an independent external Auditor, including disclosure of such fees.

- The Company will provide access to its data analytics to outsiders such as securities analysts, investment advisors, securities

brokers, credit rating agencies (CRAs), media, and external regulators, among others, for the benefit of investors’ decision making

and other beneficial actions through the Investor Relations Division or the Company Secretary’s Office.

- Disclose policies on Good Corporate Governance, Risk Management policies, Business Ethics, and Compliance report in the annual

report, the Company’s website, as well as announcements at the head office and all branches.

- Disclose roles and duties of all committees, the number of meetings and attendances, Directors’ opinions, including policies on

Directors’ and senior executives’ remuneration in the annual report and the Company’s website in accordance with the minutes of

Board of Directors’ Meeting Number 1/2014.

- In accordance with Section 59 of the Securities and Exchange Act B.E. 2535 (1992), the Directors must report their trading/holding

of Company securities, including through spouses and dependents, to the Board every month, even when there is no change in holding

or trading activities.

- Directors, executives, and staff members of relevant departments (along with their spouses and any underage children) are

prohibited from participating in any of the Company’s securities trading activities during the 14 days prior to the disclosure of the

quarterly and annual financial statements. Anyone caught violating this rule will be punished according to the Company’s regulations.

- The Company disclosed information through its publications as follows:

- Communication system of the Stock Exchange of Thailand (SET Portal)

- Annual Report

- Website: www.cgholdings.co.th

- Investor Relations Department


• The Board of Directors report

The Board of Directors of the Company were instructed to report on the responsibilities of the Directors in relation to the Company’s

financial statements and any other major items required in operating the business with transparency and fairness, as well as being in

compliance with the requirements of the SEC and/or any other governing bodies. This is required for presentation along with Auditors’

reports in the annual reports of the Company.

The Audit Committee, which included Mrs. Jitmanee Sawanapool, is knowledgeable and suitably experienced in handling audits of

financial statements and disclosing important information in their notations.

The Audit Committee also ensures that the internal controls system is adequate by using a standardized review system, as well

as modern assessments of risk management. The Committee meets with the Internal Audit and Compliance Division and external

Auditor to ensure that the Company’s financial reports are accurate and complete, in addition to disclosing the Committee’s report in the

Company’s annual report. In 2018, there were four meetings of the Audit Committee.

• Investor Relations

The Board realizes the significance of accurate, complete, and transparent disclosure of the Company’s finances and other general

information which may impact on share prices and investor sentiment. Therefore, the information must be provided in a timely and

consistently manner to all investors and stakeholders for their decision making according to the rules and regulations of the SET. The

Company shall disclose such information through various channels such as reports to the SET and the Company’s website (www.

cgholdings.co.th).

To disseminate accurate and reliable information, as well as to eliminate rumors or misleading information, the Company has assigned

an Investor Relations team for answering any questions and clarifying any information about the Company to investors and relevant

parties. The Investor Relations team will also responsible for providing information to shareholders and investors regularly. Investors

can contact the Investor Relations Division by contacting Miss Kamonporn Ongphet via telephone at 0-2256-7999 ext. 1717, or by

e-mail at [email protected].

The Compliance and Internal Audit Division was established as a center for accepting and studying complaints, as well as receiving

tip-offs. Individuals may contact the Company Secretary’s Office by telephone at 0-2256-7999 ext. 1707, or by e-mail at CompanySec@

cgholdings.co.th.

7.10 Policy on Internal information usage

The Company has set a policy to control and regulate internal information usage, so there are measures to prevent and handle it

efficiently. This is also to prevent usage of internal information personal beneficially or cronyism and complies with the principles of

Good Corporate Governance and transparency. Details are as follows:

• The Board of Directors and Management, along with spouse and underage children, must report their assets according to SEC

and SET regulations.

• Directors, executives, and staff at relevant departments (along with their spouses and underage children) are prohibited from

participating in any of the Company’s securities trading activities during the 14 days prior to the disclosure of the quarterly and

annual financial statements.

• Levels of secrecy are used to indicate the degrees to which insider information must remain a business secret. Levels are divided

based upon importance. For example, this might include disclosable information, undisclosable information, secret information,

and highly confidential information. Usage of this information must be within the frame of duty and assigned responsibility.

One cannot disclose the Company’s secret information if doing so would damage it or affect its ability to compete regardless of

whether said data is related to electronics, finances, procedures, future business plans, or any other information while employed

at, or following employment at, the Company.


• Disclosing information to public requires approval from the Chairperson, executives, division, or appointed individuals.

• Regulations are to be established regarding putting preventive measures and insider information usage in writing. There will be

lines of communication to broadcast such policies and regulations to Directors, executives, and staff at all levels of the Organization

on a continuous basis so that everyone recognizes their duties and responsibilities based on what the Company has set clearly

through their policies and rules. Anyone who fails to obey this policy will be punished accordingly.

7.11 Responsibilities of the Board of Directors

The Board of Directors has a major role in business governance to provide vision and strategic plans to operate the business, including

budgeting and risk management. They must be independence in their decision making for the best interests of the Company and its

shareholders.

• Structure of the Boards

- The Board consists of at least five but not more than twelve directors who are skilled, experienced, dedicated, and

equipped with knowledge and independent judgment to constructively discuss opinions in Board meetings. Furthermore, each

director must possess qualifications specified by law. In addition, one third of the Board or at least three members must be

independent directors.

- The appointment of Directors shall be pre-set into meeting agendas with transparent and clear nomination of well-profiled

Directors. The Company shall disclose the profiles of all directors in detail, including any changes made to the public through the

Company’s website and internal communication.

- As of December 31, 2018, four of the nine members of the Board of Directors were Independent (with one woman). The Company’s

Secretary has taken the role of the efforts between the Directors and Management as well as overseeing and coordinating with

the Legal Division and any relevant regulations or other tasks according to the Board of Directors’ resolution.

- The quantity of independent directors is not limited to a specific number. The person who will be appointed as a Director or

Independent Director must meet the qualifications by considering the skills, experience, and talents that are beneficial for

the Company. In addition, he/she must devote their time and effort into performing their role. Moreover, his/her qualifications

must meet the requirements of the SEC and the Public Limited Companies Act.

- Clearly define the power and authorities of Chairperson and Chief Executive Officer who must not be the same person.

- Clearly define the policy and procedure in the case where the CEO and senior management of the Company hold Director positions

in other companies, including the types of Directorship and the number of companies. Moreover, this must be approved by the

Board of Directors.

- Appoints the Company’s Secretary to advise on rules and regulations that the Board of Directors must be aware of in order to

perform their duties. Moreover, the Company’s Secretary must coordinate with others to ensure that actions are being taken in

accordance with the resolutions of Board meetings. The qualifications and experience requirement for such positions must be

set and reported in the annual report and the Company’s website. Moreover, the Company’s Secretary will receive training and

knowledge development in law, accounting, and other areas in relation to performing his/her role as the Company’s Secretary.


• Sub-Committees

There are six committees: the Board of Directors, the Audit Committee, the Nomination and Remuneration Committee, the Investment

Committee, the Risk Management Committee, and the Good Governance Committee that oversee different areas of the Company.

The Chairperson of each committee shall not be the head or member in any sub-committees to prevent dependency of each committee.

Furthermore, the nomination and compensation committee will hold twice meeting a year.

• Duties and Responsibilities of the Board

- Leadership, Vision, and Independent Decision

The Board of Directors have the duties and responsibilities of formulating policies, considering, approving, and revising the strategy,

goals, business plan, budgeting, and risk management of the Company. The duties and responsible also cover the actions

to ensure that the management team can execute the plan and utilize the budget in an efficient and transparent manner. In

addition, the Board of Directors emphasize Good Corporate Governance by implementing the corporate governance policy

and reviewing the implementation results of such policies at least once a year. This put emphasis on a good internal controls

system, along with an efficient risk management system and repeatedly evaluating such systems in Board of Directors’

meetings. Thus, it is essential that the Board is comprised of directors who have leadership and vision, as well as the capability

to make independent decisions for the highest benefit of the Company and its stakeholders.

- ConflictsofInterest

The Board has set clear guidelines to prevent conflicts of interest as per the corporate ethics handbook. These are listed below as

follows:

• To have a well-structured organization chart, whereby each functional unit can be monitored for performance with relevant

committees to oversee internal controls and adherence with external regulatory bodies.

• To encourage all executives and employees to adhere to good corporate governance by promoting working principles of integrity,

professional ethics, client confidentiality, and no usage of inside information for one’s own interests.

• For situations where the decision making may result in conflicts of interest or where the interests of the Company may not be in

line with stakeholders, the Board of Directors and management will consider such matters carefully, honestly, reasonably,

and independently for the best benefit to the Company. Such decisions will be disclosed to shareholders.

• In cases where there are potential conflicts of interest or related transactions, all related directors must disclose such information

to the meeting immediately and shall not have the right to attend nor vote for that agenda.

• Directors, executives, and all employees must avoid any transactions that may lead to conflicts of interest for the Company and

stakeholders. This includes contacting the Company’s customers and competitors, seeking opportunities, receiving

information from being Directors or employees of the Company for pursuing personal interests, performing activities

that compete with the Company or working on other jobs apart from that of the Company’s that could have impact on their

own duties within the Company.

• Directors, executives, and all employees must avoid holding competitors’ shares as this might affect their duties or

responsibilities. In the case that a person holds shares before being employed, the person must report to his/her relevant

supervisors and send a copy of the report to the Audit and Compliance Department.


• Business ethics

The Company strongly upholds its business ethics to the utmost importance in achieving long term success, business targets and

in maximizing shareholder’s wealth. The Board has set a code of conduct for employees to follow and use as a guideline to perform

each dedicated task with honesty and integrity to the Company, and all stakeholders. In addition, the Company has established a

set of punitive courses for those in breach of the code of conduct which is regularly monitored by the audit and compliance division.

• Internal controls, internal audit, and financial report

The Company bestows serious attention on the internal controls system at both the managerial and operational levels, focusing on

adequacy and appropriateness for the prevention of damages that may occur to the Company’s financial and business operations.

The Company has set up internal controls and audit policies as follows:

- Assigning management to prepare and jointly work with the Auditor toward the creation of accurate and complete financial reports

for all quarterly, semi-annual, and annual statements.

- Assigning the directors or the chairperson of the Audit Committee to provide an opinion on the adequacy of the internal controls

system and risk management that is to be disclosed in the annual report.

- Controlling and monitoring the Audit and Internal Controls systems to ensure that the Company adheres to all relevant standards

and regulations under the review of internal auditors and the Audit Committee.

- Clearly specifying and documenting the responsibilities and authorities in management.

- Regularly monitoring and auditing the use of Company assets to avoid damages or exploitation.

- Separating the roles and responsibilities of both individual and department duties in order to achieve a balance of power, as well

as an appropriate review of them.

- The Board of Directors emphasizes recommendations or suggestions from independent financial auditors and other external auditors

for use as guidelines for improving operational practices.

- Assigning the Internal Audit and Compliance Unit to directly report to the Audit Committee to ensure that judgments are independent

and an efficient balance of power is in place.

- Developing policies to appoint reputable external Auditors that are approved by the SEC in order to audit, advise on, and rectify

any weaknesses or errors of the Accounting and Internal Controls system.

- Establishing a risk management policy to cover all activities within the Company by assigning Management to implement the policy

and regularly report the results to the Board of Directors. The Board should review the risk management system or assess the

effectiveness of risk management on an annual basis at the very least and disclose them in the annual report or whenever there is a

change in risk level. The Board should also focus on early warning signs and unusual transactions.

- Promoting clear procedures on governing Subsidiaries and Associated Companies in order to protect investor’s benefits including

assigning directors to Subsidiaries or Associate Companies in line with the proportion of shares held in those companies.

As per Board of Directors’ Meeting Resolution No. 4/2014 on August 26, 2014, Mr. Sadawut Taechaubol, Mr. Surabhon Kwunchaithunya,

and Gen. Lertrat Rattanawanitch were appointed to represent the Company in MFC following its restructuring. This was done to comply

with its policies, regulations, laws, announcements, and other relevant rules. Their objective in voting in the MFC Board of Directors’

meetings regarding the company’s general administration and business operations is that which is to the greatest benefit to the

Company and its Subsidiary. The proportion of Company representatives among MFC directors is 23.08 percent (excluding

independent directors), with CGH owning over 24.96 percent of MFC’s shares following the restructure.


In the resolution for Board of Directors’ Meeting No. 1/2017, the Company nominated the following as candidates for serving as its

Directors of Country Group Securities Public Company Limited:


2. Mr. Sim Hong Chye



For transparency and fairness to stakeholders and clarity among Management between the Company and its subsidiary, on January

16, 2017, two directors who were serving as directors in the Subsidiary resigned from their latter posts. The two directors were Mr.

Sadawut Taechaubol and Mr. Tommy Taechaubol.

Since Mr. Sim Hong Chye, the director, passed away on December 6, 2018, there are currently seven people on the Subsidiary’s Board

of Directors.

1. Mr. Surabhon Kwunchaithunya Chairperson

2. ACM. Permkiat Lavanamal Independent Director

3. Mr. Vasu Chewprecha Independent Director

4. Mr. Pat Jungkankul Independent Director

5. Dr. Porcham Aranyakananta Independent Director

6. Dr. Veeraphat Phetcharakupt Director and CEO

7. Mr. Thanachote Rungsitivat Director

The Company’s representatives represent 42.86 percent of its Subsidiary’s directors, while Independent Directors make up 57.14

percent of all Directors.

• Meetings of the Board of Directors

- The Board of Directors set the times and dates of the six regular meetings for 2018 in advance so that Directors would be able to

prepare their schedules with convenience. There were also three irregular meetings, leading to a total of nine meetings of the Board.

- At least two-thirds Directors must be present for meetings to qualify as official Board of Directors’ Meetings. The Company’s

Chairperson has to approve the agenda by discussing with the Chief Executive Officer and must also consider requests from

Directors to add issues to meeting agendas. However, each Director is free to bring their own agendas to meetings.

- The Chairperson should appropriately allocate sufficient time for both Management and the Directors to comprehensively present

and discuss the matters during the meeting.

- The Board of Directors should encourage the senior executives to participate in a Board meeting in order to directly provide

additional information on specific issues, as well as to serve as an opportunity to get to know each other.

- The Board of Director is able to ask for additional information, advice, and services from the CEO or other assigned executives,

or request for independent opinions from external consultants who are liaised through the Company Secretary.

- Directors should receive correct, timely, adequate, and complete information from Management.

- The Company has assigned the Company Secretary to arrange and send notices for meetings along with agendas no less than

five days in advance so that each member of the Board can have enough time to review the items before the meeting.

- After receiving approval from the Directors, the minutes of each Board of Directors’ Meeting are required to be thorough and

well-documented in writing. This will be used for further reference by both the Board of Directors and any related parties.

- All Directors are encouraged to attend at least 75 percent of all Board meetings held throughout the year.


• The Board of Directors Evaluation

The Board encourages self-evaluations, as every year they assess their own work in order to study the results, issues, and obstacles

to improvement. The following evaluation is that of the Board of Directors:

- Performance Evaluation of the Board of Directors

The Directors set rules for the evaluation with details as follows:

• Subject of evaluation

a. Board structure and Qualifications

b. Roles, duties, and responsibilities

c. Board Meetings

d. Director’s duties

e. Relationship with Management

f. Self-development and executive development

• Scoring Method

0 Completely disagree or nothing was done

1 Disagree or little action was taken

2 Agree or some action was taken

3 Generally agree or considerable action was taken

4 Fully agree or excellent action was taken

• Evaluation Measurement

SCORES (%) SCORING RANGE DEFINITION

90-100

80-89

70-79

60-69

Below 60

Excellent

Above Average

Met Expectations

Adequate

Needs Improvement

As soon as possible

High standard of job performance with no or little

improvement needed.

Standard of job performance with higher than expectation.

Standard of job performance with meets expectation.

Standard of job performance but lower than expectation

and improvement can be done.

Below acceptable standard of job performance and urgent

improvement needed.


- Performance Evaluation of Sub-Committees

The Board has requested that assessments of all committees and sub-committees such as the Board of Directors, the Audit

Committee, the Risk Management Committee, and the Good Governance Committee will use the same assessment rules as the

Board. Furthermore, the subjects scrutinized in assessments will differ according to the roles and responsibilities of each.

- PerformanceEvaluationofChiefExecutiveOfficer

The Nomination and Remuneration Committee is in charge of the evaluation of Chief Executive Office work that is to be presented

to the Board of Directors. The assessment will follow the same rules as those used for the Board and sub-committees. The subjects

under assessment will be divided into 10 areas:

• Leadership,

• Strategy,

• Implementation of strategy,

• Planning and financial procedures,

• Relationship with directors,

• Relationship with outsiders,

• Management and relationship with Personnel,

• Line of succession,

• Knowledge of Product and Service, and

• Personal qualifications.

In 2018, the Nomination and Remuneration Committee considered compensation and arranged for evaluations of committees

and sub-committees. The Nomination and Remuneration Committee is in charge of evaluating Chief Executive Officer, which was

done on November 13, 2018 in order for the Board to study the results and improve the procedure.

• Remuneration for Directors and Executives

The Company has clearly and transparently set out details for Directors’ remuneration in regard to attendance fees, the

compensation for which received approval at the Annual General Shareholders’ Meeting. Directors were assigned additional duties and

responsibilities, and example being their roles as members of sub-committees, for which they will receive added compensation

at a level appropriate to the tasks and responsibilities assigned. This was based on the resolution made at the Annual General

Shareholders’ Meeting on April 27, 2018. The Board intends to act transparently and according to Good Governance principles, with

Directors receiving remuneration abstaining from voting on the matter.

The Nomination and Remuneration Committee sets the evaluation criteria for the executives as well as setting fair and clear

remunerations for them. In the case where new shares are to be issued for the executives, the Committee will need to provide its opinion

and justification for cases where more than five percent of the shares are allocated. No Directors or Executives that are to receive more

than five percent of the Company’s shares are to be members of the Committee.

Disclosure of all relevant remuneration for the Directors and the Executives is given in annual reports and on the Company’s website.


• Development of Directors and Executives

- Encouraging Directors to attend training courses about their roles and duties as intermediaries in the investment business

to acquire knowledge and understanding of their expected roles and responsibilities in order to fulfill them thoroughly and properly.

The Company sent two directors to participate in training courses at the IOD, as specified earlier in regard to the Company’s policy

on personnel development.

- Newly elected or re-elected Directors must be approved by the Office of the SEC. The Company must have complied with the above

prior to the newly appointed Directors beginning to undertake their duties.

- Any first-time directors will be informed of the Company’s regulations and Director’s Manual.

In 2018, the Company did not arrange any orientations for new directors, as there were none that year.

7.12 Roles, responsibilities and scope of work of the Chairperson and sub-committees

There are six committees in the Company: The Board of Directors, the Audit Committees, the Nomination and Remuneration Committee,

the Investment Committee, the Risk Management Committee and the Good Governance Committee. The lists of the Committees and

Sub-Committees are included in Section 1. The structures and authorities of each Committee are explained below:

• Roles and responsibilities of the Chairperson

The Chairperson’s duties are as follows:

- Setting the agenda for meetings between the Board of Directors and the Chairperson while ensuring that the Directors receive

accurate, thorough, and clear information in a timely fashion prior to the meeting so that they are properly prepared.

- Serving as the Board of Directors’ leader and chairing meetings of the Board

• Ensuring that the Board proceeds via agendas, regulations, and laws.

• Providing appropriate amounts of time and encouraging all Directors to fully and freely exchange opinions, while also carefully

engaging in decision making that is mindful of all stakeholders.

• Summarizing meeting resolutions and what is needed to proceed in a clear manner.

• Taking a leading role at Annual General Shareholders’ Meetings and ensuring that they proceed according to their agenda, the

Company’s regulations, and laws by providing a proper amount of time and giving shareholders opportunities to

express their opinions, while also carrying out question and answer sessions for shareholders in an appropriate

and transparent manner.

• Supporting and serve as a role model in following Good Governance principles and CGH’s ethics policy.

• Fostering a strong relationship between the Board and Management. Providing support to CEO and the fulfillment of

Management’s duties based on the Company’s policies.

• Supervising the disclosure of information and transparency in management in the event of a conflict of interest.

• Ensuring that the Board is properly structured and organized.

• Overseeing the operations of the Board and others, including sub-committees and individual Directors, in order to ensure

that work is completed efficiently and successfully.

• Supervising the performance of the Board of Directors as a whole, as well as that of individual Directors, the Chairperson,

and sub-committees. This is done with the intent of improving performance and improving the knowledge and abilities

of Directors and sub-committees.


• Roles and responsibilities of the Board of Directors

- Directing the Company’s business under the specified scope of objectives in compliance with regulations and laws and the

shareholders’ resolution with honesty and regard to maintain highest benefits of the shareholders.

- Setting the direction for business operation and monitor the performances of the Company and its subsidiaries in accordance with

rules and regulations of the supervisory organizations, as well as oversee the Company’s disclosure on information with respect to

the practice of Good Governance.

- Developing corporate good governance practice within the Company by documenting, reviewing and evaluating the performance

annually.

- Approving transactions regarding or concerning acquisition or disposal of assets/ sales or dismissal of properties including any

other transactions, stated by law, that require the Board or Shareholder meeting approval.

- The Board of Directors may appoint any number of executives as Sub-Committees to assist in managing, monitoring and regulating

the Company’s operation to ensure achievements in accordance with the practice of Good Governance.

- Approving the Company’s investment plan proposed by the management under Investment Committee’s approval. The Board has

approved the investment policy No.1/2015 dated 15 May 2015 that allows the investment in equity market and provide guidelines

on Company’s investment to ensure highest benefits, good internal control and efficient risk management.

- Approving the Company’s investment in business expansion or joint venture that bring highest benefits to the Company and its

subsidiary.

- Establishing business ethics and consistently communicate such practice to director, management and all employees along with

developing corporate culture in order to prevent corruption and monitoring the result regularly.

- Establishing good internal control and audit to protect the information and assets of the Company and its subsidiaries, clients,

shareholders and stakeholders. Ensuring accurate accounting and finance to certify appropriate business operation with

reasonable returns.Conduct annual evaluation on internal control and provide advices accordingly.

- Establishing risk management practice within the Company and its subsidiaries by assigning Risk Management Committee to set up

policy concerning risk management in every business aspect as well as conduct reviews and evaluations with respect to the

specified policy at least once a year.

- Endorsing the Company’s financial statements presented in annual report.

- Appointing the Chief Executive Officer and Managing Director and monitor their performances with respect to entitled authorities

and scope of responsibilities.

- Providing secretaries to the Company to comply with the regulations of the supervisory organization as well as to oversee the

activities of the Board and examine the Company’s performance with respect to the policies set by the Board. With additions of

promoting the practice of Good Governance, securing documents and information and communicating with shareholders and

supervisory organizations.

- Providing effective communication channels between the Company and shareholders, stakeholders as well as the public.

- Evaluating performance of the Company’s board of directors annually to jointly examine the result and concerns in order to develop

efficient solutions.

- Managing and monitoring its subsidiaries as the Company’s unit - oversee their operations with respect to the Company’s

regulations.

In 2018, the Board of Directors held nine meetings in total.


• Roles and responsibilities of the Audit Committee

- Ensuring accuracy and transparency on financial reports of the Company and its Subsidiary together with the Company’s Auditor

and the concerned Management.

- Ensuring compliance with the law concerning the Securities Company Act, SET regulations, and other applicable laws.

- Ensuring accountable internal controls within the Company and its Subsidiaries. Ensure independence of Internal Audit Unit and

oversee its operation as proposed by Management. Provide approval on transfers, removal, and evaluations of the Internal Audit

Manager.

- Selecting and appoint the Company’s Auditor as well as the remunerations.

- Ensuring legal compliance concerning related transactions or transactions with conflicts of interest to maintain the Company’s

benefit.

- Preparing and disclosing Audit Committee reports in the annual reports that are endorsed by the Chairperson of the Audit Committee.

The reports must consist of the following:

• Observing on financial information disclosure in terms of accuracy and accountability

• Observing on the Company’s internal controls

• Observing on the appropriateness of the auditors

• Observing on compliance with SEC and SET regulations and any other applicable laws

• Observing on the Company’s conflicts of interest

• Observing on any transactions concerning interests of shareholders or investors

within the scope of authorities provided by the Board.

• Conducting any other responsibilities as deemed appropriate by the Board.

In 2018, the Audit Committees held four meetings in total.

• Roles and responsibilities of the Nomination and Remuneration Committee

- Recruiting eligible persons and nominate them as the Company’s Directors, members of sub-committees, CEO/Managing Director

candidates to the Board or the shareholders, provided that the candidates are eligible in accordance with the qualifications set by

the Board and the regulations of the supervisory organizations.

- Nominating eligible persons as candidates for Independent Director by which the evaluations on their autonomy are conducted

prior to the nominations.

- Providing reliable advice on any amendments in the number of the Company’s Directors to the Board of Directors as needed or

deemed appropriate.

- Reviewing remuneration plans and policies of the Company and its Subsidiaries with respect to the Company’s and its subsidiaries’

annual business plans and benefits of shareholders

- Developing policies and regulations concerning the remunerations of the Directors, the Sub-Committees, the CEO/Managing Director

and propose them to meetings of the Board or shareholders for approval.

- Developing remuneration structures for the Directors, the Sub-Committees, the CEO/Managing Director that correlate with their

responsibilities and are able to retain or attract qualified persons to the Company and propose them to meetings of the Board or

shareholders for approval.

- Reviewing remuneration structures of the employees in the Company and its Subsidiaries and propose suggestions to the Board

to seek approval prior to annual remuneration.

- Reviewing contract fees and other benefits for management and employees holding significant positions (if any) as well as the

agreements on employment of authorities and make proposals to Management.

In 2018, the Nomination and Remuneration Committee held two meetings in total.


• Roles and responsibilities of the Good Governance Committee

- Defining the boundaries of the good governance of the Company and its Subsidiaries as well as recommend the guidelines of good

governance and make proposals to the Board.

- Monitoring the operations of the Board and management to ensure compliance with the good governance practice stated by the

Company and the supervisory organizations.

- Reviewing and revising the good governance guidelines of the Company and its Subsidiaries to keep up with international standards

and make proposals to the Board.

- Reviewing the autonomy of the Board and any conflicts of interest that may occur.

- Proposing methods for evaluating the Board and Sub-Committees as well as overseeing the evaluation and reporting to the Board

for future improvement.

- Reviewing the performance evaluation process of the Board and the Sub-Committees annually.

In 2018, the Good Governance Committee held one meeting in total.

• Roles and responsibilities of the Risk Management Committee

- Providing assistance to the Board in managing risk and set up risk management policies, strategies, and risk control measures in

every aspect of the Company and its Subsidiaries to guarantee systematic risk control.

- Defining risk control practice to each unit of the Company and its Subsidiaries, as well as monitor and manage risk within the

specified realm and ensure compliance with the risk management principles stated by supervisory organizations.

- Ensuring adequate risk assessments and risk management – from internal and external factors - for the Company and its

Subsidiaries, as well as conducting an analysis and proposing solutions.

- Monitoring and evaluating risk management in each department, and ensure that the Company and its Subsidiaries possess

sufficient infrastructure, resources, and adequate risk control systems.

- Reviewing the Company and its Subsidiaries’ risk management systems to ensure total coverage of all business transactions,

as well as assigning individuals or sub-committees to oversee and manage large-scale risk and report to the Risk Management

Committee.

- Preparing annual performance evaluation reports for the Risk Management Committee, set up performance targets for the following

year, and make proposals to the Board.

- Conducting any other responsibilities as deemed appropriate by the Board and the Risk Management Committees.

In 2018, the Risk Management Committee held four meetings in total.

• Roles and responsibilities of the Investment Committee

- Defining the Company and its Subsidiary’s investment plans that comply with the Board policies approved during Board Meeting

Number 1/2015 on May 15, 2015.

- Defining and review the investment policy of the Company and its Subsidiaries corresponding with the investment conditions to

maximize the Company’s interests and make proposals to the Board.

- Reviewing risk management policies and measures so they match the Company’s policies on investment.

- Overseeing the Company’s investment policy to comply with the policy set by the Board.

- Reviewing the Company’s annual investment plan and make proposals to the Board.

- Conducting a study on targeted businesses or enterprises in order to ensure maximum returns and make proposals to the Board

is authorized to utilize the Company’s expenses to invite or employ external experts as advisors for joint investment.

- Nominating the Company’s representative for election as Director or Executive of the invested company upon the Board’s approval.

- Overseeing investments with respect to the Company’s guidelines and report on the performance of the investment to the Board.

- Proposing a change in capital investment or a termination of a joint investment to the Board.

- Conducting any other responsibilities as deemed appropriate by the Board and the Risk Management Committees.

In 2018, the Investment Committee held seven meetings in total.


• Roles and responsibilities of the CEO

- Studying the goals, business direction, and investment policies, as well as the Company and its Subsidiary’s business strategy for

the purpose of presenting it to the Board

- Studying, approving, monitoring, and regulating the Company’s operations so that they comply with the policies, plans, and

investment strategy that the Board has approved with the approval of the Executive Board.

- Screening the annual budget as the Company, the Subsidiary, or Affiliated Companies within the Group prepare and present their

proposals to the Board for approval with the agreement of the Executive Board.

- Ordering/coordinating policies or business strategies that the Board has approved to Management and the Subsidiary so that they

may fulfil their expected duties.

- Monitoring and supervising operations and the risk management process. Following up on assessments of the Company and the

Subsidiary’s Management to ensure that they are following set policies.

- Studying and providing suggestions, consultation, and advice for establishing solutions to problems, as well as encoring the

development of procedures in the Company and its Subsidiary.

- Studying and providing advice about rules, discipline, and regulations in the Subsidiary’s major business operations so that they

comply with the Company’s policies.

- Having the power to issue orders, set regulations, make announcements, and keep records so that business operations are in order

and follow Company policies, with this benefiting the Company in terms of corporate governance and internal corporate discipline.

- Appointing or relocating personnel depending on their work, examining the Company and its Subsidiary’s Management’s goodwill

and remuneration and presenting them to the Board for approval with the Executive Board’s agreement.

7.13 Nomination and Appointment of Directors and Executives

• Nomination of Directors

As concluded by the Board Meeting No. 2/2014 on June 24, 2014, the Nomination and Remuneration Committee was appointed to

examine the appropriateness of the structure of the Company’s Board of Directors as well as to specify the qualifications and eligibilities

of Directors and top executives and their evaluations.

According to the Company’s Articles of Association, a shareholder has one vote per share as stated by the Public Limited Companies

Act of B.E. 2535 (1992). The selection of directors in Articles 17 – 38 of Section 5 of the Company’s Articles of Association can be

summarized as follows:

- The Board consists of at least five, but no more than 12 Directors, with at least half of the total number having to be residents of

Thailand. The Board members are not required to hold shares.

- The qualifications for Directors are as follows:

• They must be natural, sui juris persons

• They must not be bankrupt or incapable

• They must never have been imprisoned for charges concerning illegal asset possession

• They must never have been punished, fired, or removed from positions as a civil servants or government officers due to charges

of fraudulent practices


- If any Director lacks qualifications mentioned in item 2 or the Shareholders’ Meeting resolves to remove him or her from the position,

the Director must leave his or her position. Resignation notices should be presented to the Company and are considered effective

on the date they are received.

• The selection of Directors is carried out during Shareholders’ Meetings following the regulations below.

• Each shareholder has one vote per share.

• The candidates may receive votes as individuals or as groups at a time depending on the decisions of Shareholders’ Meetings.

In each voting session, shareholders have to exercise all their existing votes without breaking down to vote for different

candidates or groups of candidates.

- Candidates are appointed to vacant positions in respect to the number of votes they receive. In case of a tie, the Chairman of

the meeting has casting the vote.

- In every Annual Shareholder Meeting, one-third of Directors should leave their positions. If the concurrent number of Directors are

not divisible by three, the approximation can be applied. Directors who have left their positions may be re-elected. During the first

two years after the Company’s registration, Directors are randomly chosen and asked to leave their positions, whereas the Directors

with the longest office terms are to leave their positions afterward.

- Apart from serving a complete term, a Director is to leave his or her position in cases of:

• Death

• Resignation

• Lacking qualifications or possessing any conditions prohibited by the Public Limited Companies Act;

• Resolution of Shareholders’ Meetings in relation to item 8

• Removal by court orders

- Any Director who wishes to resign should submit their resignation letter to the Company. The resignation is effective on the date

the letter is received.

- The Shareholders’ Meeting resolves to remove Directors from their position by votes of more than three quarters of the number of

shareholders attending the meeting with voting rights by which the total number of shares accounts for more than

half of the overall number of shares held by the attending shareholders with voting rights.

- In cases where a Director position has been left vacant due to reasons other than the expiration of the associated term, the Board

is to appoint a qualified individual who is not prohibited from the position due to the Public Limited Company Act B.E. 2535 (1992)

or the Securities and Exchange Act B.E. 2535 (1992) to serve as a substitute for the Director at the next Board meeting. Barring

cases where the remaining tenure of the position is less than two months, the individual replacing the Director will stay in the title

only until the term expires. The Board Resolution indicated in the first paragraph must be made with no less than three quarters of

the remaining Directors.

- In cases where the position of Director is vacant, leaving the number of remaining Directors insufficient for Board Meetings, the

rest of the Directors can only act on behalf of the Board in setting up Shareholders’ Meetings in order to select new Directors to fill

the vacant positions. As per the first paragraph, such meetings must take place within a month of the day in which the Director

positions were left vacant to the extent which there were an insufficient number of Directors officially a Board Meeting. The individuals

filling the vacant positions as per the first paragraph will stay in those positions until the end of the previous Directors’

remaining term.

- In cases where all the Directors have left their positions, they are to hold the title of ‘Acting Director’ to continue running the

Business as is necessary until a new set of Directors take over the positions, barring cases where courts of law have otherwise

ordered the removal of the Board. The Company must arrange a Shareholders’ Meeting to select a new Board within a month of the

old one having left their positions. The invitations for the meeting must be sent to shareholders no less than 14 days prior to the

event.


- Directors have the right to receive no more than 10 percent of the Company’s net profit as remuneration. This is within their discretion,

and they are also entitled to attendance fees, transportation fees, benefits, and other forms of compensation, as well as

reimbursement for entertainment and other work-related expenses as per Company regulations. The text in the first paragraph does

not impact the rights of Directors selected from staff and any of the Company’s employees to receive compensation or benefits as

staff members or employees of the Company.

- The Board is to directly elect one of their members as its Chairperson as the Board sees fit, and can select one or more Directors

to hold the position of Vice-Chairperson. The Chairperson will assign the new Vice-Chairperson their duties according to regulations.

- At least two-thirds of all Directors must attend a meeting for it to meet the quorum. The Chairperson acts as the head of Board

Meetings. In cases where the Chairperson is unable to attend or fulfill their duties, if the Vice Chairperson is present, they will head

the meeting. However, if they are not present or unable to fulfill the duty, the Directors attending the meeting are to choose one

Director who will act as the head of the meeting. Decisions of Board Meetings come from majority votes. One Director has one vote

with the exception of those with a vested interest in an issue, who cannot vote on that item. If the votes in favor and those against

are equal in number, the head of the meeting will have an extra vote in order to make casting the vote.

- When calling for meetings, the Chairperson or appointed individuals must send meeting invitations to the Directors no less than

seven days prior to the meeting except in urgent cases. In order to protect the Company’s rights and benefits, the notifications are

to be done via other means, with it being possible to set meetings even earlier than that.

- Directors must fulfill their duties according to the law, objectives, articles of association, and Shareholders’ Meeting resolutions with

honesty, integrity, and care for the sake of the Company.

- Directors are prohibited from operating similar types of businesses and competing directly with the Company or being partners in

a limited partnership or other PLC that operates in the same business and is competing with the Company regardless of whether

it is done for their own benefit or that of others unless the Shareholders’ Meeting is notified prior to the appointment of the relevant

Directors.

- Directors must notify the Company immediately in cases where they directly or indirectly benefit from any contracts that the Company

has made or when the number of the Company or its Affiliates’ shares or debentures that the Director is holding increases or

decreases.

- The Board must hold meetings at least every three months in the province of its headquarters, or in nearby provinces, or at other

locations with set times, dates, and sites based upon the Chairperson’s discretion. Two or more Directors may make a request for

the Chairperson to call a Board Meeting. In such cases, the Chairperson or a Director appointed by the Chairperson will set a

meeting date within 14 days of the date the request was made.

- When signing (in a legally binding manner) on behalf of the Company, either the Chairperson or Executive Chairperson will sign and

stamp the Company’s seal, or two other Directors can jointly sign and stamp the seal. The Board has the power to study and change

Directors empowered to sign legally binding documents on behalf of the Company.

- If Director purchases Company assets, sells assets to the Company, or operates any businesses dealing with the Company without

approval from the Board, any transactions will not be binding to the Company whether the Director does so in their own or another

person’s name.

- Directors are to notify the Company immediately when they hold stock or debentures in the Company or its Affiliates by indicating

the increase or decrease in their total value during the fiscal year.


• Nomination of Independent Directors

On the appointment of independent director, the Board shall consider the candidate’s eligibility in accordance with the minimum

requirements of the SEC and assigned responsibilities stated within the announcement on Eligibilities and Scope of Audit Committee

of the SET as follow:

- Holds shares of no more than one percent of the number of shares with voting rights of the Company, its subsidiaries, affiliates, or

related companies. The shareholding also includes those shares held by the Independent Director’s related parties.

- Does not hold or has never held a position in the Company as a Director involved in employee management, or a position/consultant

receiving a salary or any other significant positions of the Company unless they were out of such a position for a least two years

prior to the latest appointment. The aforementioned condition does not apply to Independent Directors with former experience as

civil servants of a public sector with major shareholding proportions.

- Is not a close family member, by blood or by law, i.e. parents, spouses, siblings, children and their spouses, of a member of

Management, major shareholders with significant control over the Company, or candidates of such positions in the Company and

its Subsidiaries.

- Has never had business relationship with the Company, its Subsidiaries, Affiliates, major shareholders, or individuals who have

authority to control the Company in any way that impacts judgement. In addition to never having been a major shareholder of the

Company, its Subsidiaries, its Affiliates, or individuals with direct control over the Company’s business, unless the candidate has

been out of such a position for at least two years prior to the appointment.

- Has never been an auditor of the Company, its Subsidiaries, Affiliates, major shareholders, significant authorities, or a partner of

the audit service provider unless the individual has been out of such a position for at least two years prior to the appointment.

- Has never worked in any service profession that includes legal or financial counseling that receive service fees greater than two

million baht per year from the Company, its Subsidiaries, Affiliates, major shareholders, shareholders/individuals with the authority

to control, or partners of service professions unless the candidate has been out of such a position for at least two years prior to the

appointment.

- Is not an Independent Director who has been appointed on behalf of the Company’s Directors, major shareholders, or shareholders

with relations to major shareholders.

- Is not in a business with similar objectives or in competition with the Company and its Subsidiaries. Is not a partner or a director

involved in employee management, or a position or Consultant receiving salary, or a shareholder with more than one percent of the

total number of shares with voting right of any company with similar objectives or in competition with the Company and

its Subsidiaries.

- Not being in any other conditions that may affect judgment regarding the Company’s operations.

7.14 Board Diversity Policy

In its nomination of directors, the Company emphasizes various factors. It has prepared a Board Skill Matrix to set and inspect the

qualifications of potential Directors, considering skills and the lack of them, including those qualities that might comply with the

Organization’s business strategies.

The Company also has to consider Board diversity. The Board sets criteria for its Directors’ education levels, knowledge, ability, skills,

careers, working experience, and areas of expertise. Furthermore, they must have leadership skills and vision, both of which are useful

in business operations. Other criteria include honesty, integrity, and ethics, while race, languages, and religion are not issues.


7.15 Number of Listed Company of Chief Executive Office entitlement Policy

To ensure that Directors devote their time to working efficiently. The Board limits Directors to holding positions in no more than five

registered companies.

7.16 Number of Listed Company of Chief Executive Office entitlement Policy

The Executive Chairperson is encouraged to devote their time to fulfilling their duties efficiently. The Board allows for the holding of

director positions in no more than five other registered companies.

7.17 Directors’ Meeting Attendance policy

Board Meetings are held every three months, with special meetings possibly being held whenever necessary. To encourage Directors

to regularly attend Board Meetings, the Board requires that meetings and votes require at least two-thirds of Directors must attend to

meet the quorum. Each Director should attend at least 75 percent of all meetings in a year. The Company prepares Board Meeting

schedules a year in advance and sends out meeting invitations with agendas five working days before meetings so that Directors have

sufficient time to prepare.

Directors who are not members of Management, Independent Directors, and Audit Directors can meet between themselves as deemed

appropriate to discuss issues regarding parts of their areas of interest without having Management in attendance.

When necessary, Directors who are unable to attend any Board Meetings can give notification of their reasons for doing so to the

Chairperson at the first opportunity before the meeting.

7.18 Corporate Governance of Subsidiaries and Affiliated Companies

The Company’s Board of Directors has imposed a policy regarding the regulation and monitoring of Subsidiary and Affiliated Compa-

nies in order to secure accountability and transparency. This is to ensure efficient control over the business directions of Subsidiary

and Affiliated Companies as they are monitored and regulated by the Company’s internal unit, by which investors and stakeholders’

benefits credibility are secured.

Through the appointment of the Company’s Executives, who are eligible and qualified under the regulations of the Capital Market

Supervisory Board, as members of the Boards of Directors of the Subsidiary and Affiliated Companies, their performances are well

monitored in addition to the use of standardized practices on information disclosures, data mining, and accounting systems to facilitate

the composition of consolidated financial reports within time limits.


7.19 Transaction approval

After the resolution of Board Meeting Number 1/2559 (1/2016) on January 26, 2016, the Board resolved to modify the authority to approve

asset acquisitions and dispositions by the Company in accordance with Notification Number 2/2558 (2/2015) Re: Authority to approve

items related to expenses and purchases of assets by the Company in order to create more flexibility in business operations. This was

effective as of February 1, 2016. Details are as follows:

• The Chairperson is in charge of approving expenses or purchases within the annual budget, which is approved by the Board.

• The Chairperson or CEO must handle approval of expense or asset purchase transactions that are not in the annual budget or over

the budget by no more than three million baht. In cases where they are over by more than three million baht, requests for increased

budgets must be made to the Board.

• The CEO has authority over approval of staff compensation barring expenses that are prescribed by welfare regulations or the

Company’s other regulations. The Board in turn is in charge of approving the CEO’s expenses.

• For expenses that are incurred according to the rules and/or division-regulated parts of the Company’s business, the relevant

division is to serve as their inspector and approval must be requested from the CEO.

• The highest-ranking executive is to handle approval of recurring expenses in which cash amounts of no more than 1000 baht are

advanced.

• To prepare the Company’s capital for investment, the Investment Division is to present a plan for approval at an Investment

Committee Meeting and at a Board Meeting.

• The Company will proceed according to the law, announcements, regulations, measures, and rules of relevant agencies when

preparing acquisitions and dispositions of assets.

7.20 Audit Fees

As per the resolution of the Annual Shareholders’ Meeting in 2018, the auditor from Deloitte Touche Tohmatsu Jaiyos Co., Ltd was

appointed as the Company’s Auditor. The audit fee for 2018 was set at 1.18 million baht, with the fees for 2017 and 2018 consisting of

the Company’s Auditor’s fees and other services with the following details:

TRANSACTIONS 2018 2017

Audit Fees

Other services

Total

1.18

None

1.18

1.18

None

1.18

Unit: Millions of Baht


CORPORATE SOCIAL RESPONSIBILITY (CSR)08

The Company and its affiliates recognize the importance of and have given attention to support efforts at corporate social responsibility

(CSR) and combat corruption, including the following of good corporate governance principles in companies registered with the SET.

The Company believes that practicing business with fairness under good corporate governance will create trust with its stakeholders.

However, any business operation expects some sort of return, namely profit, and wishes for stability, advancement, or growth. For a

business to grow sustainably though, this must not be based solely on the organizations benefit or profit, but also on consideration

for returning its earnings in the form of positive outcomes to society. A fair business with social considerations working under good

corporate governance should experience sustainable success.

8.1 Fair Business Practices

The Company supports and strictly fair business practice rules and regulations, with attention to the legal and ethical dimensions, as

well as transparency, without concern to benefits that might otherwise be earned through improper actions. It does so as follow:

• Setting up guidelines of responsibility for its Board of Directors and executives to work within based on the principles of fair

competition and business practices that utilize rightfulness and fairness; for example, not engaging in immoral actions that would

harm competitors, as well as not taking advantage of personnel and subordinates.

• Establishing business practice guidelines with partners and associates that strictly follow the law and mutually set agreements, not

procuring competitors’ sensitive information through illegal means, as well as not attempting to defame them.

• Collecting of fees from general clients must strictly follow the rules and regulations regarding commission rates for security trading

set by the SET and SEC.

8.2 Anti-corruption

The Company has firmly established policies regarding morals, ethics, and transparency in its business practices, including anti-cor-

ruption efforts within the organization. Reviews of measures for internal procedures and thorough risk assessments are carried out

at least once a year. During the previous year, the Board reviewed its policies and procedures twice. At Meeting Number 1/2017 on

February 26, 2017 and Meeting Number 5/2017 on August 16, 2017, the Board, through the Company’s organizational structure and

good corporate governance, indicated its intention of combating corruption and all types of graft.

• Setting anti-corruption policies, regulations, and guidelines under the Anti-Money Laundering Act that are to be followed strictly by

management, personnel, and all associated companies.


The Company’s anti-corruption policies are as follows:

- A policy preventing the giving or acceptance of gifts, valuables, or any other benefits such as entertainment or unreasonable

expenses that do not meet the Company’s rules from customers and business associates.

- A policy against bribes aimed at facilitating or promoting relationships in business directly and indirectly.

- A procurement policy requiring fairness and transparency according to the proper regulations and guidelines.

- Supporting the Free Trade policy by avoiding fraudulent activities or any actions that might infringe upon copyright or intellectual

property.

- A policy regarding donations and all types of support funds that requires that they be carried out with complete transparency

and follow the laws of any involved nations.

In 2018 the Company participated in the following anti-corruption activities:

- CGH set up training for both its personnel and some from subsidiaries in the form of the “Anti-Corruption and Bribery 2018 Policy

and related policies” program on May 11, 2018.

- The Company joined the Anti-Corruption Organization of Thailand to support the fight against graft. It sent personnel to participate

in the “Fighting Corruption Day” event under the “Awakening Thais to Fight with Anti-Corruption” theme on September 6, 2018 at

Bhiraj room, Bitec Bangna.


8.3 Respecting Human Rights and Giving the Workforce Fair Treatment

The Company supports and respects the protection of human rights by treating customers and all stakeholders equally and fairly. This

includes proper development of personnel advancement at every level:

• Setting up benefits for personnel such as a Provident Fund (PVD), medical treatment and yearly health inspections, life and accident

insurance, funeral assistance for employees and their families, and childbirth allowances.

• Ensuring the equal and fair treatment of all employees and providing suitable compensation according to their education, ability,

responsibilities, and work performance. This is done through use of the KPI system as a means to assess performance to make

decisions regarding compensation, yearly bonuses, and promotions.

• The Company has set up:

- “Management meets staff” events every three months in order to provide opportunities for personnel to make comments about

new innovations or suggestions about the organization directly to executives. Employees are to be treated equally and fairly at

such events.

- ‘Happy Friday’ activities on Friday evening twice a month

- Corporate lunches

- Staff birthday parties

- New Year celebrations to promote unity among staff members and provide opportunities for executives and employees to

interact outside work. They aim to reduce working gaps between management and personnel and improve their working

relationship. Furthermore, they serve to improve morale and continue the process of bonding employees to the organization.

- On November 6, 2018, the Thai Institute of Directors (IOD), acting as the Secretary of the Board of Directors of Thailand’s Private

Sector Collective Action Coalition against Corruption (CAC), announced that at Board Meeting Number 3/2018 on November 5,

2018, it had decided to approve Country Group Holdings PCL as a member. It also issued a certificate of approval that will be valid

for three years from the date of approval.

- Police Lt. Gen. Werapong Chuenpagdee attended the ‘Anti-Corruption: The Practical Guide’ training course organized by the Thai

Institute of Directors.


- The Securities Company supports activities to boost employee morale such as setting up promotions for marketing personnel who

have opened up the most customer accounts and engaged in the most overall trading (of securities and bonds), as well as

arranging yearly staff parties to express gratitude to the staff.

- Transparency and fairness in the hiring process with consideration of human and labor rights without bias in regard to race, sex,

age, religion, physical condition, wealth, or social status.

- Encouraging new ideas and innovations, harmony and unity, as well as respecting privacy rights and engaging in defamation.

- Giving attention to employee safety and health in the workplace in addition to ensuring its cleanliness and tidiness. This includes

following the 5S method, with focus given to yearly check-ups and having basic medical supplies on hand in the office.

- Emphasizing training and development of personnel to improve their abilities year after year by encouraging and supporting

them in their efforts to advance their own education, knowledge, capabilities, and skills that may prove beneficial in providing

service to the Company’s customers. This should also serve to support business growth in the context of constant and rapid

change.

8.4 Responsibility to Consumers

The Company aims to deliver its clients the highest possible satisfaction by being attentive, ensuring their benefits, and offering excellent

products and services. This includes ensuring customers’ information remains confidential, fair and transparent treatment in consumer

relations, developing formats and channels of service, as well as offering a variety of products by emphasizing complete accuracy and

useful information that does not distort any facts. In order to offer the best possible service to clients, such a thing is done within the

shortest time frame possible in order to keep abreast with the situation.

Furthermore, the Company and the Securities Company give the utmost importance to maintaining their customers, business

associates, and stakeholders’ benefits and confidential information with honesty and integrity. They have prepared channels for these

groups’ complaints, providing information, and setting up clear processes to expedite efficiency, fairness, and trustworthiness. They

have also joined a process to settle disputes through the SEC.

8.5 Environmental Conservation

Although the Company’s work processes do not significantly impact the environment, it still recognizes the importance of properly

managing natural resources and effectively reducing energy consumption. The Company has policies on providing knowledge about

and staff training regarding the environment:

• Strictly obeying the law and regulations regarding the environment.

• Encouraging and rallying personnel to aid each other in saving electricity, conserve the environment, and continually adjust their

work processes to preserve it.

• Realizing effective water consumption by regularly inspecting water pipes and meters.

• Providing training through the “Conserving Nature and the Environment” program to employees, particularly in regard to using

natural resources with complete understanding of their value and reducing waste. This includes methods for environmentally-friendly

lifestyles, as well as reducing toxic substances in the household and office.


8.6 Community and Social Development

The Company is aware of its role and responsibility in caring for communities through activities that comply with its business and operations,

especially in terms of supporting education, cultivating religion, and societal improvement. In 2018, it set up the Grow Together project

to encourage social and environmental responsibility under the theme of the Company growing alongside society and the environment.

• Environmental Conservation

- CGH and CGS jointly participated in beach cleaning activities in the “Conserve the Sea and the Beach” event at Ban Amphur

Beach, Sattahip, Chonburi Province, on Friday, November 23, 2018. Fifty volunteers from the CGH staff participated with the intent

to promote a sense of conservation and preservation of the environment. Furthermore, the activity promoted good relations between

the two companies.

• Religious Cultivation

- Hosted the Royal Kathin ceremony at Wat Phra In Plaeng, Amphoe Mueang, Nakhon Phanom on November 10, 2018, at the

expense of 10,000 baht.

- Donated 50,000 baht toward the Thod Kathin ceremony for the building of a sermon hall at Wat Santitham Banpot, Tambon Na

Klang, Amphoe Na Klang, Nong Bua Lamphu on November 18, 2018.

• Societal Improvement

- Hosted funeral rites for Gen. Akaradej Sasiprapa on April 2, 2018 at Wat Sommanat at the expense of 50,000 baht.


INTERNAL CONTROLS AND RISK MANAGEMENT 09

9.1 The Board of Directors’ opinions

The Company has assigned the Audit Committee, an independent group whose duty is to review the sustainability of each step-in

internal control system operations, to report, monitor, and disclose sufficient and accurate information in order to ensure that its

internal auditing of operation and systematic development reviews prove consistently effective. Meetings are held between

management and the licensed auditor in order to prevent and correct mistakes with the proper criteria and effectiveness. Each quarter,

the Company sets up at least one meeting of the Audit Committee. In 2018, there were four such meetings.

The Board carried out an assessment of the sufficiency of its internal control system and assessment form with three members of the

Audit Committee in attendance. The review consisted of analyzing information and different reports, along with question-and-answer

sessions by management regarding the efficiency of five areas in particular:

• The organization and environment

• Risk management

• Management operation control

• Information and communication systems

• The monitoring system

Following the assessment, the Board decided that the Company already possessed a proper and sufficient internal control system

with enough personnel to proceed efficiently under such a system. Wonlop Vilaivaravit of Deloitte Touche Tohmatsu Jaiyos Co. Ltd, the

Company’s auditor for the quarter and 2018 in general, did not reveal any errors within the interior control system in the audit report.

Furthermore, the Company has also established a control mechanism to oversee its subsidies and affiliates through having its agents

serve as members of their individual Boards of Directors at proportions matching the stakes held in each company. This serves to allow

administration and monitoring of their work processes to ensure that they are following Company policy, as well as set up preventative

and risk-reducing mechanisms within these groups’ activities in order to avoid damages or losses that may otherwise occur. In addition,

it also allows for the carrying out of regular monitoring and assessments at least once a quarter, with the Company having insured the

directors, personnel, and the firm’s own responsibilities to the amount of 100 million baht to reduce and soften the impact of possible

risks from the Group’s business activities.

9.2 Head of the Auditor and Compliance Division

The Company’s Audit and Internal Audit Divisions’ duties are to ensure that its business activities and related work follow the law and its

policies by reporting directly to the Audit Committee, including senior executives, and serve in an advisory role in regard to rules and

regulations. Following Meeting Number 4/2017 on November 13, 2017, the Committee appointed Pitakphol Roongrojsuwan to oversee

the business processes of the Company and its subsidies in order to ensure that they follow the rules and regulations under its policy.


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into

tran

sact

ion

is w

ithin

the

norm

al c

ours

e of

bu

sine

ss fo

r the

Com

pany

Gen

ki C

apita

l Co.

, Ltd

.

Gen

ki P

ower

One

Co.

, Ltd

.

Tech

Ref

orm

Co.

, Ltd

.

Sola

r Tec

hnic

Co.

, Ltd

.

Inve

stm

ent i

n su

bsid

iary

com

pany

Trad

e an

d ot

her r

ecei

vabl

es

Shor

t ter

m lo

an to

sub

sidi

ary

com

pany

Trad

e an

d ot

her r

ecei

vabl

es

Trad

e an

d ot

her r

ecei

vabl

es

Trad

e an

d ot

her r

ecei

vabl

es

25,0

00,0

00

311,

100

69,1

32,6

50

2,71

0,71

8

629,

160

629,

160

25,0

00,0

00

311,

100 -

2,64

0,26

0

629,

160

629,

160


Det

ails

of s

igni

fican

t rel

ated

par

ties’

tran

sact

ions

of t

he C

ompa

ny a

re a

s fo

llow

s:

CO

NN

ECTE

D P

ART

IES

NAT

UR

E O

F TR

AN

SAC

TIO

N

AM

OU

NT

(BA

HT)

2018

2017

NEC

ESSI

TY A

ND

REA

SON

AB

ILIT

Y O

F TR

AN

SAC

TIO

N

AC

CO

RD

ING

TO

TH

E A

UD

IT C

OM

MIT

TEE’

S O

PIN

ION

Entra

nce

into

secu

ritie

s tra

ding

tran

sact

ions

fall w

ithin

the

norm

al

cour

se o

f bus

ines

s fo

r the

Sub

sidi

ary

Com

pany

. Thi

s is

don

e at

th

e m

arke

t pric

e, w

hich

offe

rs th

e sa

me

rate

s as g

ener

al c

lient

s.

Entra

nce

into

inve

stm

ents

is w

ithin

the

norm

al c

ours

e of

bus

ines

s

for t

he S

ubsi

diar

y C

ompa

ny.

Entra

nce

into

secu

ritie

s tra

ding

tran

sact

ions

fall w

ithin

the

norm

al

cour

se o

f bus

ines

s fo

r the

Sub

sidi

ary

Com

pany

. Thi

s is

don

e at

the

mar

ket p

rice,

whi

ch o

ffers

the

sam

e ra

tes a

s gen

eral

clie

nts.

Entra

nce

into

inve

stm

ents

is w

ithin

the

norm

al c

ours

e of

bus

ines

s

for t

he S

ubsi

diar

y C

ompa

ny.

Ben

Taec

haub

ol

Tom

my

Taec

haub

ol

Mut

ual f

und

man

aged

by

asso

ciat

e

Cou

ntry

Gro

up D

evel

opm

ent P

ublic

Com

pany

Lim

ited

Brok

erag

e fe

e - S

ecur

ities

Secu

ritie

s bu

sine

ss re

ceiv

able

s

Inte

rest

inco

me

Brok

erag

e fe

e - S

ecur

ities

Brok

erag

e fe

e - D

eriv

ativ

es

Dep

osit

for c

usto

mer

’s a

ccou

nt

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ritie

s bu

sine

ss re

ceiv

able

s

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rest

inco

me

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erag

e fe

e - S

ecur

ities

Inve

stm

ent -

net

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erag

e fe

e - S

ecur

ities

Dep

osit

for c

usto

mer

’s a

ccou

nt

Fina

ncia

l cos

t

Inve

stm

ent

406,

206

69,2

22,8

21

1,90

7,38

9

494,

691

1,46

1,78

8

8,87

5,29

2

116,

647,

745

3,46

0,65

2

57,8

49,3

57

71,6

87,5

53

-

5,52

3 44

42,9

96,9

69

6,64

0

2,52

3,93

5

146,

627

185,

902

416,

716

12,9

83,0

92

16,7

77,3

09

320,

310

74,0

39,8

66

62,1

92,5

46

-

5,47

9

306,

256 -


EDP

Ente

rpris

e C

ompa

ny L

imite

d

Sing

Sia

n Ye

r Pao

Com

pany

Lim

ited

MFC

Ass

et M

anag

emen

t Pub

lic C

ompa

ny

Lim

ited

CO

NN

ECTE

D P

ART

IES

NAT

UR

E O

F TR

AN

SAC

TIO

N

AM

OU

NT

(BA

HT)

2018

2017

NEC

ESSI

TY A

ND

REA

SON

AB

ILIT

Y O

F TR

AN

SAC

TIO

N

AC

CO

RD

ING

TO

TH

E A

UD

IT C

OM

MIT

TEE’

S O

PIN

ION

Und

erw

ritin

g fe

e an

d bo

nd r

epre

sent

ativ

e fe

e fa

ll w

ithin

the

norm

al c

ours

e of

bus

ines

s fo

r th

e Su

bsid

iary

Com

pany

. Thi

s is

don

e at

the

mar

ket p

rice,

whi

ch o

ffers

the

sam

e ra

tes

as

gene

ral c

lient

s.

War

ehou

se r

enta

l exp

ense

s ar

e in

the

norm

al c

ours

e of

the

Subs

idia

ry C

ompa

ny.

Adve

rtisi

ng e

xpen

ses a

re in

the

norm

al c

ours

e of

the

Subs

idia

ry

Com

pany

.

Sellin

g ag

ent f

ee is

in th

e no

rmal

cou

rse

of b

usin

ess

for

the

Subs

idia

ry C

ompa

ny. A

t the

mar

ket p

rice

whi

ch is

the

sam

erat

e as

gen

eral

clie

nts.

Fee

and

serv

ice

fees

are

in th

e no

rmal

cou

rse

of b

usin

ess

for

the

Subs

idia

ry C

ompa

ny. A

t the

mar

ket p

rice

whi

ch is

the

sam

e ra

te a

s ge

nera

l clie

nts.

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inco

me

from

serv

ices

pro

vide

d as

an

agen

t of s

tock

war

rant

ac

cept

ance

fall w

ithin

the

Com

pany

’s n

orm

al c

ours

e of

bus

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s pr

oced

ures

.

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agem

ent f

ee is

in th

e no

rmal

cou

rse

of b

usin

ess

for t

heSu

bsid

iary

Com

pany

.

Entra

nce

into

SBL

tran

sact

ions

fall

with

in th

e no

rmal

cou

rse

of b

usin

ess

for

the

Subs

idia

ry C

ompa

ny. T

his

is d

one

at th

e m

arke

t pric

e.

Fee

and

serv

ice

expe

nse

Oth

er li

abilit

ies

Prem

ises

and

equ

ipm

ent e

xpen

ses

Oth

er e

xpen

ses

Oth

er li

abilit

ies

Sellin

g ag

ent f

ee

Fee

and

serv

ice

fees

inco

me

Fee

and

serv

ice

fees

inco

me

Fee

and

serv

ice

fees

exp

ense

Fee

and

serv

ice

expe

nse

14,8

50,0

00

1,05

0,00

0

1,36

5,60

0

449,

400 -

576,

344

227,

066

26,3

00 140

18

0,06

2

- -

1,36

5,60

0

925,

550

74,9

00

479,

314

308,

110

103,

500

217,

636 -


CO

NN

ECTE

D P

ART

IES

NAT

UR

E O

F TR

AN

SAC

TIO

N

AM

OU

NT

(BA

HT)

2018

2017

NEC

ESSI

TY A

ND

REA

SON

AB

ILIT

Y O

F TR

AN

SAC

TIO

N

AC

CO

RD

ING

TO

TH

E A

UD

IT C

OM

MIT

TEE’

S O

PIN

ION

Entra

nce

into

SBL

tran

sact

ions

fall

with

in th

e no

rmal

cou

rse

of b

usin

ess

for

the

Subs

idia

ry C

ompa

ny. T

his

is d

one

at th

e m

arke

t pric

e.

Entra

nce

into

tra

nsac

tions

fal

l with

in t

he n

orm

al c

ours

e of

bu

sine

ss fo

r the

Sub

sidi

ary

Com

pany

.

Tran

sact

ions

for

the

purp

ose

of b

ond

tradi

ng a

re w

ithin

the

Com

pany

’s n

orm

al b

usin

ess

proc

edur

es, a

nd r

ates

are

fixe

d to

the

mar

ket r

ate.

Entra

nce

into

finan

ce tr

ansa

ctio

ns fa

ll w

ithin

the

norm

al c

ours

e of

bus

ines

s fo

r the

Sub

sidi

ary

Com

pany

.

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nce

into

secu

ritie

s tra

ding

tran

sact

ions

fall w

ithin

the

norm

al

cour

se o

f bus

ines

s fo

r the

Sub

sidi

ary

Com

pany

. Thi

s is

don

e at

th

e m

arke

t pric

e, w

hich

offe

rs th

e sa

me

rate

s as g

ener

al c

lient

s.

Entra

nce

into

inve

stm

ents

is w

ithin

the

norm

al c

ours

e of

bus

ines

s

for t

he C

ompa

ny

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ritie

s bu

sine

ss re

ceiv

able

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er a

sset

s

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ritie

s bu

sine

ss p

ayab

les

Deb

entu

re is

sued

and

bor

row

ings

Fina

ncia

l cos

t

Dep

osit

for c

usto

mer

’s a

ccou

nt

Brok

erag

e fe

e - S

ecur

ities

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erag

e fe

e - D

eriv

ativ

es

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ritie

s bu

sine

ss re

ceiv

able

s

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ritie

s bu

sine

ss p

ayab

les

Fina

ncia

l cos

t

Inte

rest

inco

me

Inve

stm

ent

17,0

80,5

80

-

362,

085,

228

89,6

92,1

03

2,61

1,71

6

35,0

16,1

61

17,1

84,7

31

615,

272

20,7

33,6

00

11,1

89,7

97

351,

310

554,

263

42,9

79,5

54

-

26,8

57

195,

963,

289

89,6

16,5

30

1,06

4,51

1

40,0

69,1

34

8,47

9,41

8

1,12

1,51

0

21,3

91,3

71

97,9

25,7

18

180,

707 - -

Pada

ng In

dust

ry P

ublic

Com

pany

Lim

ited

and

grou

p

Cou

ntry

Gro

up H

oldi

ngs

Publ

ic C

ompa

ny

Lim

ited


CO

NN

ECTE

D P

ART

IES

NAT

UR

E O

F TR

AN

SAC

TIO

N

AM

OU

NT

(BA

HT)

2018

2017

NEC

ESSI

TY A

ND

REA

SON

AB

ILIT

Y O

F TR

AN

SAC

TIO

N

AC

CO

RD

ING

TO

TH

E A

UD

IT C

OM

MIT

TEE’

S O

PIN

ION

Shor

t-ter

m lo

ans

to th

e Pa

rent

Com

pany

is a

form

of fi

nanc

ial

supp

ort t

hat f

alls

und

er th

e no

rmal

cou

rse

of b

usin

ess

for t

he

Com

pany

and

its

subs

idia

ry

Und

erw

ritin

g fe

e is

in th

e no

rmal

cou

rse

of b

usin

ess

for

the

Subs

idia

ry C

ompa

ny. A

t the

mar

ket p

rice

whi

ch is

the

sam

e ra

te a

s ge

nera

l clie

nts.

SBL

fee

is in

the

norm

al c

ours

e of

bus

ines

s fo

r the

Sub

sidi

ary

Com

pany

. At t

he m

arke

t pric

e w

hich

is th

e sa

me

rate

as g

ener

al

clie

nts.

Entra

nce

into

den

t ins

trum

ents

trad

ing

trans

actio

ns fa

ll w

ithin

th

e no

rmal

cou

rse

of b

usin

ess

for

the

Subs

idia

ry C

ompa

ny.

This

is d

one

at th

e m

arke

t pric

e, w

hich

offe

rs th

e sa

me

rate

s as

gen

eral

clie

nts.

Entra

nce

into

tra

nsac

tions

fal

l with

in t

he n

orm

al c

ours

e of

bu

sine

ss fo

r the

Sub

sidi

ary

Com

pany

.

Div

iden

d pa

ymen

ts w

ere

per

the

reso

lutio

n fro

m th

e An

nual

G

ener

al S

hare

hold

ers’

Mee

ting

Div

iden

ds w

ere

per

the

reso

lutio

n fro

m t

he A

nnua

l Gen

eral

Sh

areh

olde

rs’ M

eetin

g

Shor

t-ter

m lo

an to

the

Pare

nt c

ompa

ny

Inte

rest

inco

me

Fee

and

serv

ice

inco

me

Fee

and

serv

ice

inco

me

Secu

ritie

s bu

sine

ss re

ceiv

able

s

Secu

ritie

s bu

sine

ss p

ayab

les

Oth

er a

sset

s

Div

iden

d pa

id

Div

iden

d in

com

e

16,7

51,1

85

485,

342 -

236,

641 - -

419,

731 -

345

16,2

65,8

43

9,91

7,89

8

8,88

4,80

0 -

50,9

74,9

88

51,5

66,8

70

271,

848

97,7

28,9

44 273

The

audi

t com

mitt

ee h

as o

pini

on th

at a

ll af

orem

entio

ned

trans

actio

ns h

ave

pric

ing

polic

ies

and

cond

ition

s in

line

with

the

norm

al b

usin

ess,

nec

essi

ty, a

ppro

pria

te a

nd re

ason

able

. Mor

eove

r, ac

cura

cy

and

com

plet

ion

of in

form

atio

n di

sclo

sure

rela

ted

to th

ese

trans

actio

n ar

e co

mpl

eted

with

the

SET

regu

latio

ns.


Measures and procedures for Related Party Transactions

The Company has set up measures for controlling related party transactions between the Company, its subsidiary, and others who may

have conflicts of interest, personal interest, or possible future conflicts of interest in accordance with the notifications of the SEC or SET.

The Audit Committee will provide opinions about the necessity of transactions and the appropriate market price, as well as comparing

prices with those outside the Company.

In the event that the Audit Committee lacks the expertise to handle any related party transactions, the Company will arrange for an

independent expert or the Company’s Auditor to comment on such transactions in order to provide comments to those of the Audit

Committee and/or the Board of Directors and/or shareholders, depending on the situation. Those with conflicts of interest or personal

interests will not be able to vote on resolutions regarding related party transactions.

Furthermore, the Company will disclose information on connected transactions and vital asset acquisitions or dispositions of

the Company and its Subsidiaries in accordance with the notifications of the SEC and the SET, as well as the accounting standards

of the Federation of Accounting Professions under the Royal Patronage of his Majesty the King (FAP).

Policies or tendencies for future Related Party Transactions

The Company and its subsidiary may enter into related party transactions with the potential for conflicts of interest down the line.

In the event of normal business transactions and normal business supporting transactions under general trade conditions with

individuals who may have conflicts of interest, the Company has set a policy for preparing prices which can be compared with those from

outsiders. This operates according to and strictly follows Board-approved guidelines under the Securities and Exchange Act B.E. 2535

(1992). Prices must be set clearly and fairly, and terms must not lead to any transfers of benefits. Because more people may have

potential conflicts of ties increase after the restructuring is complete. The majority of such transactions will be business deals related

to securities trading.

However, in the event of new transactions or changing conditions, the Internal Audit and Compliance Department will review the

information and prepare and submit a report to the Audit Committee so that the latter may consider it and make decisions regarding

the appropriateness of prices and reasonableness of transactions on the quarterly basis. In the case of normal business transactions,

normal business support transactions, and other related party transactions, the Company will follow the above measures to control

related party transactions.


FINANCIAL STATEMENTS AND PERFPRMANCE11

FINANCIAL STATEMENTS

11.1 AUDITOR

2018 and 2017 Mr. Wonlop Vilaivaravit, CPA Number 6797 Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd.

2016: Mr. Chavala Tienpasertkij, CPA Number 4301 Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd.

11.2 SUMMARY OF AUDITOR OPINION IN THE PAST THREE YEARS

2018: Unqualified opinion



11.3 AUDITOR’S REMUNERATION

1. AUDIT FEE

1.1 AUDIT FEE OF THE COMPANY

• In 2018, the Company received approval from Annual Ordinary Shareholders’ Meeting Number 1/2561 (1/2018)’s Resolution

to appoint an auditor from Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd to serve as their own auditor, as well as to set

the audit fee in 2018 at 1.18 million baht.







1.2 AUDIT FEE OF THE SUBSIDIARY COMPANY (CGS)

• In 2018, the Subsidiary received approval from the Annual Ordinary Shareholders’ Meeting Resolution to appoint an auditor

from Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd to serve as their own auditor, as well as to set the audit fee in 2018 at

2.32 million baht.


from Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd to serve as their own auditor, as well as to set the audit fee in 2017

at 2.32 million baht.


from Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd to serve as their own auditor, as well as to set the audit fee in 2016

at 2.50 million baht.

1.3 Non Audit Fee

- None -


11.4 CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND ITS SUBSIDIARIESSTATEMENTS OF FINANCIAL POSITION

Unit: Baht

CONSOLIDATED FINANCIAL STATEMENTS

CURRENT ASSETS

Cash and cash equivalents

Current investments

Trade and other current receivables

Receivables from Clearing House and

broker - dealers

Securities business receivables

Others

Total Current Assets

NON-CURRENT ASSETS

Investment held as available for sale

Investments in associates

Other long-term investments

Property, premises and equipment

Intangible assets

Deferred tax assets

Other non-current assets

Total Non-Current Assets

TOTAL ASSETS

ASSETS AS AT DECEMBER 31,

2018 20162017 %% %

764,689,492

3,342,601,363

102,297,975

241,386,690

1,322,103,550

-

5,773,079,070

1,264,041,786

1,565,180,722

5,745,550

177,697,617

114,444,851

148,428,682

111,497,749

3,387,036,957

9,160,116,027

1,236,650,168

3,125,103,946

67,507,410

440,349,433

722,323,919

-

5,591,934,876

1,131,327,322

1,677,881,395

5,488,750

101,276,414

106,603,085

98,674,661

90,541,722

3,211,793,349

8,803,728,225

1,480,778,898

1,972,029,814

112,669,546

866,529,737

452,024,236

-

4,884,032,231

259,261,232

2,356,418,849

5,488,750

125,416,567

104,479,469

103,731,849

86,382,153

3,041,178,869

7,925,211,100

8.35

36.49

1.12

2.63

14.43

-

63.02

13.80

17.09

0.06

1.94

1.25

1.62

1.22

36.98

100.00

14.05

35.50

0.77

5.00

8.20

-

63.52

12.85

19.06

0.06

1.15

1.21

1.12

1.03

36.48

100.00

18.68

24.88

1.42

10.93

5.70

-

61.63

3.27

29.73

0.07

1.58

1.32

1.31

1.09

38.37

100.00


Unit: Baht


LIABILITIES AND SHAREHOLDERS’ EQUITY AS AT DECEMBER 31,

2018 20162017 %% %

CURRENT LIABILITIES

Trade and other current payables

Payables to Clearing House and

broker-dealers

Securities business payables

Debts issued and borrowings

Short-term loan from a subsidiary

Total Current Liabilities

NON-CURRENT LIABILITIES

Debentures

Provisions for employee benefits

Deferred tax liabilities

Other non-current liabilities

Total Non-Current Liabilities

TOTAL LIABILITIES

124,722,303

246,173,586

1,630,005,282

211,166,928

-

2,212,068,099

1,036,820,446

22,662,774

-

1,825,455

1,061,308,675

3,273,376,774

114,722,321

-

1,255,813,366

144,215,456

262,800

1,515,013,943

1,079,800,000

17,472,190

-

1,819,018

1,099,091,208

2,614,105,151

88,023,860

44,607,750

1,747,949,290

-

6,898,662

1,887,479,562

-

12,930,291

-

3,313,503

16,243,794

1,903,723,356

1.36

2.69

17.79

2.31

-

24.15

11.32

0.25

-

0.02

11.59

35.74

1.30

-

14.27

1.64

0.00

17.21

12.26

0.20

-

0.02

12.48

29.69

1.11

0.56

22.06

-

0.09

23.82

-

0.16

-

0.04

0.20

24.02

STATEMENTS OF FINANCIAL POSITION (CONTINUED)


SHAREHOLDERS’ EQUITY

SHARE CAPITAL

Authorized share capital

6,143,905,902 ordinary shares

of Baht 1 each


of Baht 1 each

Issued and paid-up share capital


of Baht 1 each, fully paid


of Baht 1 each, fully paid

Ordinary shares held by subsidiary

Share premium

Other component of shareholders’ equity

Retained earnings

Appropriated - Statutory reserve

Unappropriated

EQUITY ATTRIBUTABLE TO OWNERS

OF THE PARENT

NON-CONTROLLING INTERESTS

TOTAL SHAREHOLDERS’ EQUITY

TOTAL LIABILITIES AND


Unit: Baht


LIABILITIES AND SHAREHOLDERS’ EQUITY (CONTINUED) AS AT DECEMBER 31,

2018 20162017 %% %

STATEMENTS OF FINANCIAL POSITION (CONTINUED)

6,143,905,902

4,336,906,384

(9,850)

669,063,234

(83,205,867)

148,552,970

796,305,191

5,867,612,062

19,127,191

5,886,739,253

9,160,116,027

6,075,927,916

4,336,768,278

(9,850)

668,977,138

32,878,735

145,584,211

986,061,340

6,170,259,852

19,363,222

6,189,623,074

8,803,728,225

6,075,927,916

4,336,768,278

(9,850)

668,977,138

(21,779,738)

137,020,743

880,636,165

6,001,612,736

19,875,008

6,021,487,744

7,925,211,100

47.35

(0.0001)

7.30

(0.91)

1.62

8.69

64.05

0.21

64.26

100.00

49.26

(0.0001)

7.60

0.37

1.66

11.20

70.09

0.22

70.31

100.00

54.72

(0.0001)

8.44

(0.27)

1.73

11.11

75.73

0.25

75.98

100.00

Notes to the financial statements form an integral part of these financial statements


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME



2018 20162017 %% %

Unit: Baht

REVENUES

Brokerage fees

Fees and services income


Interest and dividend income

Gain on investments and derivatives

Share of profit from investments in

associates


securities business

Gain on classified investments in

associate to investment held as

available for sale

Other incomes

TOTAL REVENUES

EXPENSES

Employee benefits expenses

Fee and service expenses

Finance costs

Bad debt and doubtful accounts

(Reversal)

Other expenses

TOTAL EXPENSES

INCOME (LOSS) BEFORE INCOME TAX

INCOME TAX INCOME

NET INCOME (LOSS) FOR THE YEARS

Total other comprehensive income (loss)

for the year – net of tax

TOTAL COMPREHENSIVE INCOME

(LOSS) FOR THE YEAR

300,170,937

75,623,939

28,632,002

106,141,337

56,193,881

34,387,189

-

-

15,357,135

616,506,420

352,408,305

92,899,852

82,200,842

(10,248,364)

159,592,913

676,853,548

(60,347,128)

25,399,227

(34,947,901)

(116,211,882)

(151,115,614)

214,219,937

52,131,088

14,274,809

59,513,311

220,746,723

243,063,723

-

21,612,253

24,945,596

850,507,440

345,806,059

67,106,054

11,624,630

10,952,493

192,075,267

627,564,503

222,942,937

11,688,395

234,631,332

54,660,315

289,291,647

541,614,653

79,064,695

34,881,568

77,461,729

167,152,484

134,744,849

306,002,957

-

15,713,518

1,356,636,453

542,371,846

109,397,514

11,268,766

12,503,674

255,776,625

931,318,425

425,318,028

(33,248,282)

392,069,746

(9,028,519)

383,041,227

48.69

12.27

4.64

17.22

9.11

5.58

-

-

2.49

100.00

57.16

15.07

13.33

(1.66)

25.89

109.79

(9.79)

4.12

(5.67)

(18.84)

(24.51)

25.19

6.13

1.68

7.00

25.95

28.58

-

2.54

2.93

100.00

40.66

7.89

1.37

1.29

22.58

73.79

26.21

1.37

27.58

6.43

34.01

39.92

5.83

2.57

5.71

12.32

9.93

22.56

-

1.16

100.00

39.98

8.07

0.83

0.92

18.85

68.65

31.35

(2.45)

28.90

(0.67)

28.23


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)

NET INCOME (LOSS) FOR THE YEAR

ATTRIBUTABLE TO

Owners of the Company

Non-controlling interests

NET INCOME (LOSS) FOR THE YEAR

NET COMPREHENSIVE INCOME (LOSS)

FOR THE YEAR ATTRIBUTABLE TO

Owners of the Company

Non-controlling interests

NET COMPREHENSIVE INCOME (LOSS)

FOR THE YEAR

EARNINGS PER SHARE

Basic earnings per share

Diluted earnings per share

(5.69)

0.02

(5.67)

(24.51)

(0.001)

(24.51)

27.55

0.03

27.58

33.98

0.03

34.01

28.85

0.05

28.90

28.17

0.06

28.23



2018 20162017 %% %

Unit: Baht

(35,066,631)

118,730

(34,947,901)

(151,107,065)

(8,549)

(151,115,614)

(0.0081)

(0.0081)

234,315,235

316,097

234,631,332

288,973,708

317,939

289,291,647

0.0540

0.0540

391,333,066

736,680

392,069,746

382,230,120

811,107

383,041,227

0.0902

0.0902


MANAGMENT DISCUSSION AND ANALYSIS12

The significant financial information for Country Group Holdings Public Company Limited and its subsidiaries (“the Company”) is as follows:

FINANCIAL RATIO

201620172018

Unit: Million Baht

TOTAL ASSETS

TOTAL LIABILITIES


TOTAL REVENUES

TOTAL EXPENSES

NET PROFIT

Net profit margin (Percentage)

Liquid assets to total assets (Percentage)

Earning assets to total assets (Percentage)

Debt-to-equity ratio (times)

9,160.12

3,273.38

5,886.74

616.50

676.85

(34.95)

(5.69)

63.02

84.51

0.56

8,803.73

2,614.11

6,189.62

850.50

627.56

234.63

27.55

63.52

61.62

0.42

7,925.21

1,903.72

6,021.49

1,356.63

931.32

392.07

28.82

60.94

73.91

0.32

Company Performance Analysis

The Company’s main source of income consisted of brokerage commissions, fees and services, profits, and returns on financial in-

struments (profit from investments, interest, and dividends), interest from margin loans (from securities trading), and shares of profits

from investments in associated companies. The proportion of each major source of income, including the growth of each, is as follows:

201620172018


REVENUES2018 20162017

Brokerage fees



Interest and dividends

Gain (losses) on investments and derivatives

Share of profit from investments in

associated companies


securities business

Gain on classified investments in associated

to available-for-sale investments

Other income

TOTAL

REVENUES

EXPENSES

SHARE OF PROFIT FROM INVESTMENTS IN

ASSOCIATED COMPANIES

INCOME BEFORE INCOME TAX

INCOME (EXPENSE) TAX

NET INCOME FOR THE YEARS

300.17

75.63

28.63

106.14

56.19

34.38

-

-

15.36

616.50

214.22

52.13

14.28

59.51

220.75

243.06

-

21.61

24.94

850.50

541.63

79.06

34.88

77.46

167.15

134.74

306.00

-

15.71

1,356.63

48.69

12.27

4.64

17.22

9.11

5.58

-

-

2.49

100.00

25.19

6.13

1.68

7.00

25.95

28.58

-

2.54

2.93

100.00

39.92

5.83

2.57

5.71

12.32

9.93

22.56

-

1.16

100.00

The Company would like to announce the operating results for the year ended December 31, 2018, which has been audited by auditor

as follows:

AMOUNT AMOUNTAMOUNT %% %

Units: Million baht

Units: Million baht

INCOME STATEMENTSFOR THE YEARS ENDED DECEMBER 31,

2018 2017 CHANGES %

582.12

676.85

34.38

(60.35)

25.40

(34.95)

607.44

627.56

243.06

222.94

11.69

234.63

(25.32)

49.29

(208.68)

(283.29)

13.71

(269.58)

(4.17)

7.85

(85.85)

(127.07)

117.28

(114.90)


According to audited financial statement as at 31 December 2018, The Company posted net loss of 34.95 million baht, compared to

the previous year’s net profit of 234.63 million baht. The primary causes of this change were:

1. Revenues amounted to 582.12 million baht, down 25.32 million baht (4.17 percent) from the previous value of 607.44 million baht.

This was due to the following:

• Revenue from commission increased by 85.96 million baht (40.12 percent) because of increasing trading volume in equity

and derivative product.

• Income from fees and services up by 23.49 million baht (45.06 percent), mostly due to underwriting fee.

• Interest Income on margin loan up by 14.36 million baht (100.56 percent), mostly due to increasing lending amount.

• Interest and dividends up by 46.63 million baht (78.36 percent), mostly due to increased investment portfolio.

• Gain on investments and derivatives down by 164.56 million baht (74.55 percent) mostly as a result of gain on trading portfolio

which decrease.

2. Expense amounted to 676.85 million baht, up 49.29 million baht (7.85 percent) from the previous value of 627.56 million baht.

This was due to the following:

• Employee benefit expense increased by 6.60 million baht (1.91 percent) because of the number of employees increasing

• fees and services expense up by 25.79 million baht (38.43 percent), mostly due to increased fee based on increasing trading

volume in equity and derivative product.

• Financial cost up by 70.58 million baht (607.40 percent), mostly because at 1 December 2017, the Company issued debenture

of 1,079.8 million baht with interest rate 6.25% p.a.

• Reversal of bad debt and doubtful accounts of 10.25 million baht due to increasing collateral of the clients

• Other expense down by 32.49 million baht (16.91 percent), mostly due to decreasing FX loss.

3. The Company’s share of profits from investments in affiliates came out to 34.38 million baht, an decrease of 208.68 million baht

(85.85 percent) from the previous value of 243.06 million baht due to an associate company’s net loss.

Consolidated financial statement of financial position

2018 CHANGES2017 %

Units: Million baht

STATEMENT OF FINANCIAL POSITION

TOTAL ASSETS

TOTAL LIABILITIES

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

NON-CONTROLLING INTERESTS


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

9,160.12

3,273.38

5,867.61

19.13

5,886.74

9,160.12

8,803.73

2,614.11

6,170.26

19.36

6,189.62

8,803.73

356.39

659.27

(302.65)

(0.23)

(302.88)

356.39

4.05

25.22

(4.90)

(1.19)

(4.89)

4.05


TOTAL ASSETS

As of December 31, 2018, the Company possessed total assets worth 9,160.12 million baht, an increase of 356.39 million baht (or 4.05

percent) from 8,803.73 million baht in 2017.

The changes in total assets were mainly attributable to the following factors:

1. As of December 31, 2018, the Company possessed cash and cash equivalents amounting to 764.69 million baht, a decrease

of 471.96 million baht (38.16 percent) from 1,236.65 million baht in 2017. Furthermore, the cash and cash equivalents were mostly

made up of cash and cash equivalents, along with deposits in the form of cash and short-term deposits within the Company’s

financial institutions, so that they would be flexible enough for use as working capital for daily operations

2. As of December 31, 2018, the Company had short and long-term investments in the amount of 4,612.39 million baht, an increase

of 350.47 million baht (8.22 percent) compared to 4,261.92 million baht in 2017.

Units: Million baht

SIGNIFICANT ASSETS 20172018 % %

Cash and cash equivalents

Temporary investments, Investment held as available for

sale and Other long-term investments

Receivables from Clearing House

Securities and derivatives business receivables - net

Investments in associated companies

Others

TOTAL

764.69

4,612.39

241.39

1,322.10

1,565.18

654.37

9,160.12

1,236.65

4,261.92

440.35

722.32

1,677.88

464.61

8,803.73

Units: Million baht

DETAILS OF INVESTMENTS 20172018

Current investments

Unit trusts

Listed securities

Debt instruments

Available-for-sale investments

Debt instruments held to maturity

Deposits at financial institutions


Available-for-sale investments

Other long-term investments

General investments

TOTAL

167.60

766.69

2,352.06

2.04

-

54.21

1,264.04

5.75

4,261.92

46.40

1,108.53

1,901.22

14.71

-

54.24

1,131.33

5.49

4,261.92

8.35

50.35

2.64

14.43

17.09

7.14

100.00

14.05

48.41

5.00

8.20

19.06

5.28

100.00


The majority of the investments are in listed securities, debt instruments, and unit trusts that are in demand.

The Company set up an Investment Committee to oversee securities investments for the Company’s accounts and those of its

subsidiaries, who will be responsible for establishing circumspect investment guidelines. The Company and its subsidiaries also solidified

a complete readjustment of the allowance for changes in value and allowance for impairment loss according based on accordance

with accounting standards and SEC announcements.

3. As of December 31, 2018, the Company possessed 241.39 million baht in receivables from clearing house, a reduction of 198.96

million baht (45.18 percent) compared to the previous year. The receivables from clearing house were made up of the value of net

sales to customers and subsidiaries’ accounts during the last two days of the year.

4. As of December 31, 2018, the Company’s net securities and derivatives business receivables came out to 1,322.10 million baht,

an increase of 588.78 million baht (83.04 percent) compared to the previous year, which mainly due to increases in receivables

from debtors’ deposit of 329.91 million baht and increases in loans (for debtors to trade securities) of 159.45 million baht. This was

the net value of securities business receivables and derivatives business receivables in the last two business days of the year.

Bad Debts and Doubtful Accounts

Regarding to policies for allowances for doubtful accounts, subsidiaries have their own for establishing such allowances through their

assessment of individual debtors’ financial status. Such assessments include consideration for the risk of repayment and the value

of any collateral used. Subsidiaries have set allowances for doubtful accounts based on principals and interest. Their debt is also

classified according to the Office of the SEC’s Notifications Number KorThor. 33/2543 and 5/2544, dated August 25, 2000 and February

15, 2001, respectively.

As of December 31, 2018, and 2017, the subsidiaries recorded an allowance for doubtful accounts for outstanding loans that came out

to 359.64 million baht and 375.78 million, respectively.

TOTAL LIABILIES

As of December 31, 2018, the Company had total liabilities amounting to 3,273.38 million baht, an increase of 659.27 million baht

(25.22 percent) compared to the previous year at 2,614.11 million baht).

The significant changes in the Company’s liabilities were as follows:

Units: Million baht

SIGNIFICANT LIABILITIES 20172018 % %

Payables to Clearing House and broker-dealers


Securities business payables

Debentures

Others

TOTAL

246.17

211.17

1,630.01

1,036.82

149.21

3,273.38

-

144.22

1,255.81

1,079.80

134.28

2,614.11

7.52

6.45

49.80

31.67

4.56

100.00

-

5.52

48.04

41.30

5.14

100.00


1. As of December 31, 2018, the Company had trade accounts payable and other payables totaling 246.17 million baht, an increase

of 246.17 million baht (100.00 percent) compared to the previous year. trade accounts payable came from buy value of clients’

trading activities in subsidiary within last two business days of the year

2. As of December 31, 2018, the Company had debt securities issued and other loans with a maturity of less than one year totaling

211.17 million baht, with interest rates of 3.1 to 3.5 percent per annum.

3. As of December 31, 2018, the Company had securities business payables of 1,630.01 million baht, a increase of 374.20 million

baht (29.30 percent) from the previous year at 1,255.81 million baht. A increase came mainly from SBL transaction

4. On December 1, 2017, the Company issued unsubordinated and unsecured debentures amounting to 1,079.80 million baht,

which specify the names of their holders and representatives. This was done for the purpose of expansion in order to support its

investments and the principal is to be repaid in full on June 1, 2020, with a fixed interest rate of 6.25 percent per annum. The interest

fund is to be distributed every three months on March 1, June 1, September 1, and December 1 throughout each year of the life of

the debentures.

The Company had registered the debentures with the Thai Bond Market Association (Thai BMA) and with the SET on December 1,

2017.


As of December 31, 2018, the Company had total shareholders’ equity of 5,886.74 million baht, an decrease of 302.88 million baht

(4.89 percent) from the 6,189.62 million baht of the previous year.

Units: Million baht

DETAILS OF INVESTMENTS TOTALNON-

CONTROLLING INTERESTS

TOTAL OWNERS OF THE PARENT

Outstanding balance as of January 1, 2018

Changes in non-controlling interests from additional

purchases of common subsidiary shares

Issue common share

Dividends Paid

Total comprehensive income (loss) for the year

Balance as of December 31, 2018

19.36

(0.22)

-

-

(0.01)

19.13

6,170.26

0.02

0.23

(151.79)

(151.11)

5,867.61

6,189.62

(0.20)

0.23

(151.79)

(151.12)

5,886.74


Liquidity and Sufficiency of Capital

The majority of the sources of capital in business operations came from the Company’s own funds. Furthermore, its credit line stemmed

from various commercial banks serving as sources of turnover/working capital and supporting business operations. Additionally, the

Company issued unsubordinated and unsecured debentures amounting to 1,079.80 million baht, which specify the names of their

holders and representatives. This was done for the purpose of expansion of investment

The net capital ratios of the Company’s subsidiaries as of December 31, 2018 and 2017 were 99.02 percent and 132.35 percent, respec-

tively. This was quite high compared to the seven percent minimum rate mandated by the SEC that securities companies must maintain.

Summary

The Company is known for its financial strength and high liquidity. As of December 31, 2018, it possessed cash and cash equivalents

amounting to 764.69 million baht (18.35 percent of the Company’s total assets). Moreover, it also had the total investment amount of

4,612.39 million baht (50.35 percent of the Company’s total assets). In addition, the company had the ratio of liquid assets to total assets

at 63.02 percent, the earning assets to total assets ratio at 67.42 percent, and the ratio of debt to shareholders’ equity at 0.56 times.

The Company has three main strategies that drive its success:

1) Efficient asset management,

2) Restructuring of its affiliates with emphasis on producing better returns, and

3) Acquiring businesses with high growth potential.

For the year ending December 31, 2018, despite of net loss of 34.95 million baht due to lower profit from and investments and derivatives

assets (164.56 million baht) and lower share of profits from investments in affiliates (208.68 million baht), the company still had strong

revenue from commission, income from fees and services, interest Income on margin loan up, and interest and dividends up, which

increased by 170.43 million baht from 340.14 million baht in 2017 to 510.57 million baht in 2018.


THE BOARD OF DIRECTORS’ REPORT ON ITS RESPONSIBILITY TO FINANCIAL REPORT

The Board of Directors is responsible for the consolidated financial statements of Country Group Holdings Public Company Limited and

its subsidiaries (the “Group”) and the separate financial statements of Country Group Holdings Public Company Limited (the “Company”),

including financial information as appeared in this annual report. The financial statements were stated in accordance with generally

accepted accounting principles, applying the appropriate accounting policies and consistently adhered with careful discretion and

best estimation in the preparation. Besides, significant information was disclosed sufficiently in the notes accompanying the financial

statements for the benefit of shareholders and investors in a transparent manner.

The Board of Directors has provided and maintained the appropriate and efficient internal control system to reasonably ensure that the

accounting data are accurate, complete, and sufficient to maintain its assets and to prevent fraud and materially irregular operation.

In this regard, the Board of Directors has appointed the Audit Committee to review the accounting policies, the quality of the financial

reports, the internal control, and internal audit systems. The opinions of the Audit Committee with regard to the matters, which appear

in the Report of the Audit Committee, are already shown in this annual report.

The consolidated financial statements and the separate financial statements of the Company have been audited by the Company’s

Auditor, namely Deloitte Touche Tohmatsu Jaiyos Co. Ltd. In auditing, the Board of Directors provided all relevant information and

documents to enable the Auditor to examine and express his opinion in conformity with generally accepted auditing standards. The

Auditor’s opinion, which appears in the auditor’s report, is already shown in this annual report.

The Board of Directors is of the opinion that the overall internal control system of the Company is satisfactory and can bring about

reasonable confidence that the consolidated financial statements and the separate financial statements of the Company for the year

ending December 31, 2018 were reliable and prepared in conformity with generally accepted accounting principles and carried out

accurately in accordance with law and all relevant rules and regulations and were sufficiently disclosed.

(Mr. Sadawut Taechaubol)

Chairperson

(Mr. Tommy Taechaubol)

Director and Chief Executive Officer


REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED

Opinion

We have audited the consolidated financial statements of Country Group Holdings Public Company Limited and its subsidiaries

(the “Group”) and the separate financial statements of Country Group Holdings Public Company Limited (the “Company”), which

comprise the consolidated and separate statements of financial position as at December 31, 2018, and the related consolidated and

separate statements of profit or loss and other comprehensive income, changes in shareholders’ equity and cash flows for the year

then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated and separate financial statements present fairly, in all material respects, the

financial position of Country Group Holdings Public Company Limited and its subsidiaries and of Country Group Holdings Public

Company Limited as at December 31, 2018, and its financial performance and its cash flows for the year then ended in accordance with

Thai Financial Reporting Standards (“TFRSs”).

Basis for Opinion

We conducted our audit in accordance with Thai Standards on Auditing (“TSAs”). Our responsibilities under those standards are further

described in the Auditor’s Responsibilities for the Audit of the Consolidated and separate Financial Statements section of our report. We

are independent of the Group in accordance with the Federation of Accounting Professions’ Code of Ethics for Professional Accountants

together with the ethical requirements that are relevant to the audit of the consolidated and separate financial statements, and we have

fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and

separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and

separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.


KEY AUDIT MATTERS KEY AUDIT PROCEDURES

Revenue recognition - Brokerage fee of a subsidiary

Brokerage fees are fees from securities business and

derivatives business which have terms and conditions to

charge the fees based on trading volume. Key audit matter is

whether the brokerage fees are occurrence and have been

completely and accurately recognized in accordance with

Thai Financial Reporting Standards.

The accounting policies of revenue recognition, the details

of brokerage fees and operating segment information were

disclosed in Note 3.1, Note 29 and Note 42 to the financial

statements respectively.

Impairment of investment

Investments consist of investments in trading securities,

investments in available for sale securities, general

investments and investments in subsidiary and associated

companies. The Group’s managements have to consider the

impairment indicators and estimate the impairment provision

of those investments. The consideration is depended on the

management judgement and key assumptions. Therefore, the

key audit matter is whether the valuation of investment and the

impairment have been recognized in accordance with Thai

Financial Reporting Standards.

The accounting policies of investments in debt and equity secu-

rities and investments in subsidiary and associated companies

and the details of investments in debt and equity securities

and investments in subsidiary and associated companies were

disclosed in Note 3.6, Note 3.9, Note 6, Note 11, and Note 12

to the financial statements respectively.

Our audit procedures were as follows:

• Understand the revenue recognition process and related

internal control procedures

• Review the design and implementation of the internal

control procedures

• Perform the operating effectiveness testing over the internal

control procedures around revenue recognition process

including related information and technology system and

• Perform substantive testing as follows:

- Examine the trading volume information of securities

and derivative of the customers and brokerage

fees rates, recalculate the brokerage fees and

examine the related supporting documents of those

revenues whether the brokerage fees are

occurrence and have been completely and

accurately recognized

- Perform substantive analytical procedures relating

to the brokerage fees.

Our audit procedures were as follows:

• Understand the impairment consideration process and

related internal control procedures

• Review the design and implementation of the internal

control procedures

• Perform the operating effectiveness testing over the

internal control procedures around impairment

consideration process and

• Perform substantive testing as follows:

- Examine the supporting documents in relation to

the management consideration of impairment

indicators for investment

- Assess the appropriateness of valuation model

and key assumptions the management used in the

estimation of the impairment provision for

investment.


Other Information

Management is responsible for the other information. The other information comprises information in the annual report, which is expected

to be made available to us after the date of this auditors’ report.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express any

form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information

identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the

financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter

to those charged with governance and the management of the Group.

Responsibilities of Management and Those Charged with Governance for the Consolidated and Separate Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated and separate financial statements

in accordance with TFRSs, and for such internal control as management determines is necessary to enable the preparation

of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, management is responsible for assessing the Group’s and the

Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic

alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are

free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable

assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with TSAs will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated

and separate financial statements.

As part of an audit in accordance with TSAs, we exercise professional judgment and maintain professional skepticism throughout the

audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud

or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher

than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override

of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related

disclosures made by management.


• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit

evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the

Group’s and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required

to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate,

to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,

future events or conditions may cause the Group’s and the Company’s to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated and the separate financial statements, including

the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and

events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within

the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and

performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and

significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements

regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear

on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the

audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe

these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare

circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so

would reasonably be expected to outweigh the public interest benefits of such communication.

BANGKOK

February 26, 2019

Wonlop VilaivaravitCertified Public Accountant (Thailand)

Registration No. 6797

DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.


COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENTS OF FINANCIAL POSITIONAS AT DECEMBER 31, 2018

NOTES CONSOLIDATEDFINANCIAL STATEMENTS

SEPARATEFINANCIAL STATEMENTS

2018 2017 2018 2017

ASSETS

CURRENT ASSETS

Cash and cash equivalents 5 764,689,492 1,236,650,168 221,317,567 241,714,556

Current investments 6.1 3,342,601,363 3,125,103,946 1,077,435,106 1,383,717,909

Trade and other current receivables 7 102,297,975 67,507,410 64,882,680 209,828,885

Receivables from Clearing House and

broker - dealers8 241,386,690 440,349,433 - -

Securities business receivables 9 1,322,103,550 722,323,919 - -

Short-term loan to a subsidiary 10 - - 69,132,650 -

Total Current Assets 5,773,079,070 5,591,934,876 1,432,768,003 1,835,261,350

NON-CURRENT ASSETS

Investments held as available for sale 6.2 1,264,041,786 1,131,327,322 1,109,281,627 985,963,682

Investments in associates 11 1,565,180,722 1,677,881,395 1,502,449,120 1,502,449,120

Investments in subsidiaries 12 - - 3,488,625,181 3,488,422,524

Other long-term investments 6.3 5,745,550 5,488,750 - -

Property, premises and equipment 13 177,697,617 101,276,414 10,043,248 13,935,504

Intangible assets 14 114,444,851 106,603,085 - -

Deferred tax assets 15 148,428,682 98,674,661 39,851,211 -

Other non-current assets 16 111,497,749 90,541,722 1,442,882 1,442,882

Total Non-Current Assets 3,387,036,957 3,211,793,349 6,151,693,269 5,992,213,712

TOTAL ASSETS 9,160,116,027 8,803,728,225 7,584,461,272 7,827,475,062

Unit : Baht



COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENTS OF FINANCIAL POSITION (CONTINUED)AS AT DECEMBER 31, 2018

Unit : Baht



2018 2017 2018 2017

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Trade and other current payables 17 124,722,303 114,722,321 49,852,788 113,303,195

Payables to Clearing House and broker-dealers 18 246,173,586 - - -

Securities business payables 19 1,630,005,282 1,255,813,366 - -

Debts issued and borrowings 20 211,166,928 144,215,456 - -

Short-term loan from a subsidiary 21 - - 16,178,082 5,000,000

Current income tax payable - 262,800 - -

Total Current Liabilities 2,212,068,099 1,515,013,943 66,030,870 118,303,195

NON-CURRENT LIABILITIES

Debentures 22 1,036,820,446 1,079,800,000 1,079,800,000 1,079,800,000

Provisions for employee benefits 23 22,662,774 17,472,190 3,735,480 1,586,097

Deferred tax liabilities 15 - - - 4,234,728

Other non-current liabilities 1,825,455 1,819,018 - -

Total Non-Current Liabilities 1,061,308,675 1,099,091,208 1,083,535,480 1,085,620,825

TOTAL LIABILITIES 3,273,376,774 2,614,105,151 1,149,566,350 1,203,924,020


COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENTS OF FINANCIAL POSITION (CONTINUED)AS AT DECEMBER 31, 2018



2018 2017 2018 2017

SHAREHOLDERS' EQUITY

SHARE CAPITAL 24

Authorized share capital

6,143,905,902 ordinary shares of Baht 1 each 6,143,905,902 6,143,905,902

6,075,927,916 ordinary shares of Baht 1 each 6,075,927,916 6,075,927,916

Issued and paid-up share capital

4,336,906,384 ordinary shares of Baht 1 each,

fully paid 4,336,906,384 4,336,906,384

4,336,768,278 ordinary shares of Baht 1 each,

fully paid 4,336,768,278 4,336,768,278

Ordinary shares held by subsidiary (9,850) (9,850) - -

Share premium 25 669,063,234 668,977,138 1,421,725,878 1,421,639,782

Other component of shareholders' equity 6.4 (83,205,867) 32,878,735 18,516,606 97,660,549

Retained earnings

Appropriated

Statutory reserve 28 148,552,970 145,584,211 56,511,529 54,408,860

Unappropriated 796,305,191 986,061,340 601,234,525 713,073,573

EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT 5,867,612,062 6,170,259,852 6,434,894,922 6,623,551,042

NON-CONTROLLING INTERESTS 19,127,191 19,363,222 - -

TOTAL SHAREHOLDERS’ EQUITY 5,886,739,253 6,189,623,074 6,434,894,922 6,623,551,042

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 9,160,116,027 8,803,728,225 7,584,461,272 7,827,475,062

Unit : Baht



COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED DECEMBER 31, 2018

Unit : Baht



2018 2017 2018 2017

REVENUES

Brokerage fees 29 300,170,937 214,219,937 - -

Fees and services income 30 75,623,939 52,131,088 - -

Interest on margin loans 28,632,002 14,274,809 - -

Interest and dividend income 31 106,141,337 59,513,311 165,395,654 217,770,955

Gain on investments and derivatives 32 56,193,881 220,746,723 27,605,913 77,120,831

Gain on classified investments in associate to

investment held as available for sale 11 - 21,612,253 - -

Other incomes 33 15,357,135 24,945,596 2,438,758 504,072

Total revenues 582,119,231 607,443,717 195,440,325 295,395,858

EXPENSES

Employee benefits expenses 352,408,305 345,806,059 60,302,139 69,484,941

Fee and service expenses 92,899,852 67,106,054 22,975,112 31,300,315

Finance costs 82,200,842 11,624,630 68,575,825 15,633,870

Bad debt and doubtful accounts (Reversal) (10,248,364) 10,952,493 - -

Other expenses 36 159,592,913 192,075,267 25,833,828 72,767,632

Total expenses 676,853,548 627,564,503 177,686,904 189,186,758

Share of profit from investments in associates 2.3.3 34,387,189 243,063,723 - -

INCOME (LOSS) BEFORE INCOME TAX (60,347,128) 222,942,937 17,753,421 106,209,100

INCOME TAX INCOME 38 25,399,227 11,688,395 24,299,953 20,105,228

NET INCOME (LOSS) FOR THE YEARS (34,947,901) 234,631,332 42,053,374 126,314,328



COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)FOR THE YEAR ENDED DECEMBER 31, 2018

Unit : Baht

CONSOLIDATEDFINANCIAL STATEMENTS


2018 2017 2018 2017

OTHER COMPREHENSIVE INCOME (LOSS)

Components of other comprehensive income that

will not be reclassified to profit or loss

Share of other comprehensive income of associates 44,169 - - -

44,169 - - -

Components of other comprehensive income that will be

reclassified to profit or loss

Gains (loss) on re-measuring

investments held as available for sale (129,610,646) 101,379,466 (100,722,917) 122,075,686

Adjustment (surplus) deficit on re-measuring

investments held as available for sale disposed

during the years 7,469,395 (310,828) 1,792,988 376,274

Share of other comprehensive loss of associates (18,498,881) (21,851,442) - -

Income tax relating to components of other

comprehensive income that will be reclassified

to profit or loss 38 24,428,250 (24,556,881) 19,785,986 (24,490,392)

(116,211,882) 54,660,315 (79,143,943) 97,961,568

Other comprehensive income (loss) for the years - net of tax (116,167,713) 54,660,315 (79,143,943) 97,961,568

TOTAL COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS (151,115,614) 289,291,647 (37,090,569) 224,275,896

NOTES


COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (CONTINUED)FOR THE YEAR ENDED DECEMBER 31, 2018

Unit : Baht



2018 2017 2018 2017

PROFIT (LOSS) ATTRIBUTABLE TO

Owners of parent (35,066,631) 234,315,235 42,053,374 126,314,328

Non-controlling interests 118,730 316,097 - -

NET PROFIT (LOSS) FOR THE YEARS (34,947,901) 234,631,332 42,053,374 126,314,328


ATTRIBUTABLE TO

Owners of parent (151,107,065) 288,973,708 (37,090,569) 224,275,896

Non-controlling interest (8,549) 317,939 - -


FOR THE YEARS (151,115,614) 289,291,647 (37,090,569) 224,275,896

EARNINGS (LOSS) PER SHARE ATTRIBUTABLE

TO OWNERS OF PARENT

Basic earnings (loss) per share 39 (0.0081) 0.0540 0.0097 0.0291

Diluted earnings (loss) per share 39 (0.0081) 0.0540 0.0097 0.0291

NOTES


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COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2018



2018 2017 2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES

Income (loss) before income tax (60,347,128) 222,942,937 17,753,421 106,209,100

Adjustments

Depreciation and amortization 26,152,183 27,113,064 3,966,514 4,003,916

Bad debt and doubtful accounts (reversal) (10,248,364) 10,952,493 - -

Unrealized loss on re-measuring investments 61,418,090 598,308 18,012,707 5,922,208

Loss from reclassification investments 24,653,794 - 8,506,003 -

(Gain) loss on disposal and written off equipment

and intangible assets 352,625 (2,366,262) - -

Share of profit from investment for using equity method (34,387,186) (243,063,723) - -

Gain on classified investments in associates to

investment held as available for sale - (21,612,253) - -

Gains on disposal investment property (200,000) - - -

Employee benefits expense 7,789,494 5,401,899 2,149,383 1,210,186

Finance costs 82,200,842 11,624,630 68,575,825 15,633,870

Interest and dividends income (134,773,339) (73,788,120) (165,395,654) (217,770,955)

Gain (loss) from operating activities before

changes in operating assets and liabilities (37,388,989) (62,197,027) (46,431,801) (84,791,675)

(Increase) decrease in operating assets

Trade and other current receivables (7,527,996) 56,162,203 148,038,351 (19,850,037)

Receivables from Clearing House and broker - dealers 198,962,743 426,180,304 - -

Securities business receivables (589,531,267) (281,252,176) - -

Trading investments (646,955,101) (1,231,565,501) 71,174,989 (828,166,233)

Other non-current assets (22,256,026) (4,159,569) - -

Unit : Baht

NOTES


COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENT OF CASH FLOWS (CONTINUED)FOR THE YEAR ENDED DECEMBER 31, 2018



2018 2017 2018 2017

Increase (decrease) in operating liabilities

Trade and other current payables 10,767,279 21,156,152 (53,033,726) 78,045,105

Payables to Clearing House and broker - dealers 246,173,586 (44,607,750) - -

Securities business payables 404,140,713 (493,697,132) - -

Provisions for employee benefits (2,598,910) (860,000) - -

Other non-current liabilities (73,458) (1,494,485) - -

Cash received (paid) from operating activities (446,287,426) (1,616,334,981) 119,747,813 (854,762,840)

Cash received from interest 66,737,330 28,504,712 24,894,212 2,532,988

Cash paid for interest (15,949,273) (6,866,864) (326,922) -

Cash paid for corporate tax (9,294,204) (13,035,300) (233,849) (1,282,866)

Net cash flows provided by (used in) operating activities (404,793,573) (1,607,732,433) 144,081,254 (853,512,718)

Unit : Baht


COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESSTATEMENT OF CASH FLOWS (CONTINUED)FOR THE YEAR ENDED DECEMBER 31, 2018

Unit : Baht



2018 2017 2018 2017

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for purchases of investment held as available for sale (607,500,783) (398,941,799) (546,003,424) (351,833,414)

Cash received from sales of investment held as available for sale 621,670,524 491,485,225 530,960,348 426,057,146

Cash received from bill of exchange - 60,000,000 - 40,000,000

Cash paid for purchase of investments in associates - (24,600,979) - (24,600,979)

Cash paid for general investment (256,800) - - -

Cash paid for purchase of share of a subsidiary from

non-controlling interests (202,658) (181,990) (202,658) (172,546)

Cash received from dividend of investments in associates 128,650,840 104,311,696 128,650,840 104,311,696

Cash received from dividend of investment in subsidiaries - - - 97,728,944

Cash received from dividend of investments in securities 51,292,605 30,436,143 10,376,612 12,908,684

Cash paid for short-term loan to a subsidiary - - (69,132,650) -

Cash received from sales of investment property 1,500,000 - - -

Cash paid for purchases of property equipment and

intangible assets (110,767,778) (12,577,332) (74,258) (221,142)

Cash received from sales of premises and equipment and

intangible assets - 9,847,067 - -

Net cash flows provided by investing activities 84,385,950 259,778,031 54,574,810 304,178,389

CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for short-term loan from a subsidiary - - - (395,000,000)

Cash received from issued ordinary shares 224,202 - 224,202 -

Cash received from debentures - 1,079,800,000 - 1,079,800,000

Cash received from debts issued and borrowings 67,500,000 145,000,000 - -

Cash paid for dividends (151,789,753) (120,974,328) (151,789,753) (120,301,952)

Interest paid (67,487,502) - (67,487,502) -

Net cash flows provided by (used in) financing activities (151,553,053) 1,103,825,672 (219,053,053) 564,498,048

Net increase (decrease) in cash and cash equivalents (471,960,676) (244,128,730) (20,396,989) 15,163,719

Cash and cash equivalents as at January 1, 1,236,650,168 1,480,778,898 241,714,556 226,550,837

Cash and cash equivalents as at December 31, 764,689,492 1,236,650,168 221,317,567 241,714,556


NOTES

4.2

4.2

27

5


COUNTRY GROUP HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIESNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED DECEMBER 31, 2018

1. General information

1.1 The Company’s general information

Country Group Holdings Public Company Limited (the “Company”) was registered as a Public Limited Company under Thai laws on

May 15, 2014. The registered head office is located at 132, Sindhorn Tower 1, 9th Floor, Wireless Road, Lumpini, Pathumwan, Bangkok

10330. And as at May 4, 2016, the Company has changed its registered office to 132, Sindhorn Tower 3, 20th Floor, Wireless Road,

Lumpini, Pathumwan, Bangkok 10330.

The Company has extensive transactions and relationships with the related company. Accordingly, the financial statements may

not necessarily be indicative of the conditions that would have existed or the results of operations that would have occurred had the

Company operated without such affiliations.

1.2 General information of Country Group Securities Public Company Limited

Country Group Securities Public Company Limited (the “subsidiary”), is incorporated in Thailand since 1993. The subsidiary converted

the status to be a Public Limited Company in accordance with the Public Limited Companies Act on February 17, 1994. The head

office is located at 132, Sindhorn Tower 1, 2nd Floor, Wireless Road, Lumpini, Pathumwan, Bangkok 10330. And as at June 11, 2018,

the subsidiary has changed its registered office to 132, Sindhorn Tower 1, 3rd Floor, Sindhorn Tower 3, 18th 20th Floor, Wireless Road,

Lumpini, Pathumwan, Bangkok 10330.

As at December 31, 2018 and 2017, the subsidiary has 8 branches and 7 branches, respectively.

On October 22, 2008, the Ministry of Finance had approved the securities business license type Kor No. Lor Kor-0002-01 for the

subsidiary and cancelled the old securities business licenses No. 51/2517 and No. 18/2547. The securities business license type Kor

is the license that undertakes securities business in various categories consisting of

1. Securities Brokerage

2. Securities Trading

3. Securities Underwriting

4. Investment Advisory Service

5. Mutual Fund Management

6. Private Fund Management

7. Securities Borrowing and Lending

8. Venture Capital Management.

The subsidiary was granted a license No. 0007/2551 on August 13, 2008 to undertake the derivatives agent from the Office of the

Securities and Exchange Commission which has been effective since July 31, 2008.

The subsidiary was granted a license on November 6, 2018 to undertake the derivatives dealer from the Office at the Securities and

Exchange Commission.

The subsidiary was granted a license on July 12, 2010 to undertake the securities borrowing and lending business as the Principal from

the Office of the Securities and Exchange Commission.

The Office of the Securities and Exchange Commission has approved the subsidiary to act as the financial advisory from March 21,

2017 to March 20, 2022.

The subsidiary was granted a license on June 8, 2017 to undertake the private fund (except provident fund) from the Office of the

Securities and Exchange Commission.

The mutual fund management and the venture capital management shall be commenced only after the subsidiary is granted the approval

from the Office of the Securities and Exchange Commission.


2. Basis for preparation and presentation of the financial statements

2.1 Country Group Holdings Public Company Limited and its subsidiaries (the “Group”) maintains its accounting records in Thai

Baht and prepares its statutory financial statements in the Thai language in conformity with Thai Financial Reporting Standards and

accounting practices generally accepted in Thailand.

2.2 The Group’s financial statements have been prepared in accordance with the Thai Accounting Standard (TAS) No. 1 (Revised

2017) “Presentation of Financial Statements”, which was effective for financial periods beginning on or after January 1, 2018 onward,

and the Regulation of The Stock Exchange of Thailand (SET) dated October 2, 2017, regarding the preparation and submission

of financial statements and reports for the financial position and results of operations of the listed companies B.E. 2560 and the

Notification of the Department of Business Development regarding “The Brief Particulars in the Financial Statements (No.2) B.E.

2559” dated October 11, 2016.

The additional information is disclosed in accordance with the regulations of the Office of the Securities and Exchange Commission.

No. Sor Tor. 22/2559, dated June 2, 2016, regarding “The Form of Financial Statements for Securities Companies (No.2)”, which

is effective for the financial statements for the accounting periods beginning on or after January 1, 2017 onwards.

2.3 The consolidated financial statements include the financial statements of Country Group Holdings Public Company Limited and

its subsidiaries, which the subsidiaries detailed as following:

COMPANY’S NAME NATURE OFBUSINESS

COUNTRY OFINCORPORA-

TION

PERCENTAGE OFSHAREHOLDING

ASSETS AS APERCENTAGE

TO THE CONSOLIDATEDTOTAL ASSETS

REVENUES AS APERCENTAGE TO THE

CONSOLIDATEDTOTAL REVENUES

AS ATDECEMBER 31,

AS ATDECEMBER 31,


2018PERCENT

2017PERCENT

2018PERCENT

2017PERCENT

2018PERCENT

2017PERCENT

Subsidiaries

Country Group Securities Securities

Public Company Limited business Thailand 99.3 99.3 55.5 51.4 86.8 61.6

Genki Capital Co., Ltd. Energy Thailand 100.0 100.0 0.0 0.0 0.0 -

Indirect Subsidiaries

Genki Power One Co., Ltd. Energy Thailand 100.0 100.0 0.0 0.0 0.0 -


2.4 Thai Financial Reporting Standards affecting the presentation and disclosure in the current year financial statements

During the year, the Group has adopted the revised and new financial reporting standards issued by the Federation of Accounting

Professions which become effective for fiscal years beginning on or after January 1, 2018. These financial reporting standards were

aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards

revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of

these financial reporting standards does not have any significant impact on the Group’s financial statements.

2.5 Thai Financial Reporting Standards announced in the Royal Gazette but not yet effective

2.5.1 Thai Financial Reporting Standards which will be effective for the financial statements with fiscal years beginning on or after

January 1, 2019

New Thai Financial Reporting Standards and Thai Financial Reporting Standard Interpretation

The Federation of Accounting Professions has issued the Notification regarding Thai Financial Reporting Standards and

Thai Financial Reporting Standard Interpretation which have been announced in the Royal Gazette and will be effective for

the financial statements for the period beginning on or after January 1, 2019 onwards.

Thai Financial Reporting Standards (“TFRS”)

TFRS 1 First-time Adoption of International Financial Reporting Standards

TFRS 15 Revenue from Contracts with Customers

2.3.1 Material balances and transactions between the Group have been eliminated from the consolidated financial statements.

2.3.2 The financial statements of the subsidiaries for the year ended December 31, 2018 included in the consolidated financial

statements were audited.

2.3.3 Share of profit (loss) from investments for using equity method expressed as a percentage of total revenues of the Group

presented in the consolidated financial statements for the years ended December 31, 2018 and 2017 as follows:


2018 2017

SHARE OF PROFIT (LOSS) FROM INVESTMENT

FOR USING EQUITY METHOD

PERCENTAGE OF TOTAL

REVENUES(LOSS)

SHARE OF PROFIT (LOSS) FROM INVESTMENT

FOR USING EQUITY METHOD

PERCENTAGE OF TOTAL

REVENUES (LOSS)

BAHT PERCENT BAHT PERCENT

MFC Asset Management Public Company Limited 41,966,071 6.8 35,536,213 4.2

Padaeng Industry Public Company Limited (7,578,882) (1.23) 227,750,312 26.8

Country Group Development Public Company Limited - - (20,222,802)(1) (2.4)

Total 34,387,189 243,063,723

(1) The Company realized share of profit (loss) from investments for using equity method for the year ended December 31, 2017 from such company until September 21, 2017 which is the date of transferring investments from investment in associate to investment held as available for sale. (see Note 11)


Thai Financial Reporting Standard Interpretation (“TFRIC”)

TFRIC 22 Foreign Currency Transactions and Advance Consideration

There is the key change to the core principle of TFRS 15, which introduces a 5-step approach to revenue recognition, as

follow:

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligations in the contract.

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

Under TFRS 15, an entity recognizes revenue when (or as) a performance obligation is satisfied. TFRS 15 will supersede

the Standards and Interpretations relating to revenue upon its effective date.

Thai Financial Reporting Standards (TFRSs) Revised 2018

The Federation of Accounting Professions has issued the Notification regarding Thai Financial Reporting Standards (TFRSs)

Revised 2018 which have been announced in the Royal Gazette and will be effective for the financial statements for the

period beginning on or after January 1, 2019 onwards. These financial reporting standards were aimed at alignment with

the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of

wording and terminology and reference to other TFRSs except following TFRSs, which there are revision or additional

paragraph and accounting guidance.

Thai Accounting Standard No.28 (Revised 2018) “Investment in Associates and Joint Ventures” clarifies about the election

of measurement an investment in an associate or a joint venture at fair value through profit or loss, and clarifies the

consideration about the impairment of an investment in an associate or a joint venture. This accounting standard requires

retrospective method for such amendment.

Thai Accounting Standard No.40 (Revised 2018) “Investment Property” clarifies about transfers of investment property to,

or from, other accounts when, and only when, there is a change in use. This accounting standard requires prospective

method for such amendment.

Thai Financial Reporting Standard No.2 (Revised 2018) “Share-based Payment” adds the requirements, which require

prospective method for the amendment as follows:

1) The requirement about treatment of vesting and non-vesting for a cash-settled share-based payment transaction

2) The requirement about share-based payment transactions with a net settlement feature for withholding tax obligations

3) The requirement about accounting for a modification of a share-based payment transaction that changes its classification

from cash-settled to equity-settled

Thai Financial Reporting Standard No.4 (Revised 2018) “Insurance Contracts” determines the option for insurance industry

to temporarily exempt from applying Thai Financial Reporting Standard No.9 “Financial Instruments” (“TFRS 9”). An entity

can elect to exempt from TFRS 9 for annual periods beginning before January 1, 2022 or before TFRS 17 is effective.

2.5.2 Thai Financial Reporting Standards which will be effective for the financial statements with fiscal years beginning on or after

January 1, 2020

The Federation of Accounting Professions has issued the Notification regarding Thai Financial Reporting Standard Group of

Financial Instruments which have been announced in the Royal Gazette and will be effective for the financial statements

for the period beginning on or after January 1, 2020 onwards, as follows:

Thai Accounting Standards (“TAS”)

TAS 32 Financial Instruments: Presentation

Thai Financial Reporting Standards (“TFRS”)

TFRS 7 Financial Instruments: Disclosures

TFRS 9 Financial Instruments


Thai Financial Reporting Standard Interpretations (“TFRIC”)

TFRIC 16 Hedges of a Net Investment in a Foreign Operation

TFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

These TFRSs make stipulations relating to the classification of financial instruments and their measurement at fair value

or amortized cost; taking into account the type of instrument, the characteristics of the contractual cash flows and the

Company’s business model, the calculation of impairment using the expected credit loss method, and the concept of hedge

accounting. These include stipulations regarding the presentation and disclosure of financial instruments. These TFRSs

will supersede the Standards and Interpretations relating to the financial instruments upon its effective date.

The Group’s management will adopt such TFRSs in the preparation of the Group’s financial statements when it becomes

effective. The Group’s management is in the process to assess the impact of these TFRSs on the financial statements of

the Group in the period of initial application.

3. Significant accounting policies

The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies.

Significant accounting policies adopted by the Company and its subsidiaries are summarized below:

3.1 Revenue recognition

Brokerage fees

Brokerage fees from securities business and derivatives business are recognized as income on the transaction date.


Fees income is recognized on an accrual basis and services income is recognized on the basis of percentage of completion, as

specified in the service agreement.

Gain (loss) on investments and derivatives

Gain (loss) on investments and derivatives are recognized as income or expenses on trading date.


Interest is recognized on an accrual basis, but where there is uncertainty as to the collectability of loans and interest, the

subsidiary stops using an accrual basis.

In the following cases, collectability of loans and interest is held to be uncertain.

1) Loans which are not fully collateralized.

2) Installment loans with repayments scheduled less frequently than every 3 months and for which principal or interest is overdue by

more than 3 months.

3) Installment loans with repayments scheduled over than every 3 months, unless there is clear evidence and a high degree of certainty

that full repayment will be received.

4) Problem financial institution.

5) Other receivables from which interest payment is overdue for 3 months or more.

These conditions are based on the guidelines stipulated by the Office of the Securities and Exchange Commission.

Interest and dividend on investments

Interest on investments is recognized as income on an accrual basis. Dividend on investments is recognized as income when

the dividend is declared.


3.2 Expenses recognition

Expenses are recognized on an accrual basis.

Operating leases

Lease in which substantially all the risks and rewards of ownership of assets remain with the lessor, payments made under operating

leases are recognized in the statements of profit or loss and other comprehensive income on a straight - line basis over the term of the

lease. Lease incentives received are recognized in the statements of profit or loss and other comprehensive income as an integral part

of the total lease payments made. Contingent rentals are charged to the statements of profit or loss and other comprehensive income

in the accounting period in which they are incurred.

3.3 Recognition and amortization of customer deposits

Money which customers have placed with the subsidiary in cash accounts, cash balance and credit balance for securities trading and

derivatives trading is recorded as the asset and liability of the subsidiary. As at the statement of financial position date, the subsidiary

writes these amounts off from both assets and liabilities and presents only assets and liabilities which belong to the subsidiary.

3.4 Cash and cash equivalents

Cash and cash equivalents include cash on hand, current deposit accounts, saving deposit accounts, time deposit with maturities not

later than 3 months from acquisition date, and without commitments, call notes receivables and term promissory notes with maturities

within 3 months from acquisition date. This accords with the Notification issued by the Office of the Securities and Exchange Commission.

3.5Depositsatfinancialinstitutions

Deposits at financial institutions include fixed deposit accounts, promissory notes with maturities over 3 months from acquisition date,

deposit used as collateral and certificate of deposit with maturities within 3 months from acquisition date which the Group intends to

hold to roll over it.

3.6 Investments

Investments in marketable securities held for trading are stated at fair value, with any resultant gain or loss on re-measuring investments

recognized in the statements of profit or loss and other comprehensive income.

Investments in debt securities that the Group intends and is able to hold to maturity are stated at amortized cost less impairment losses.

The difference between the acquisition cost and redemption value of such debt securities is amortized using the effective interest rate

method over the period to maturity.

Investments in debt securities and marketable equity securities other than those securities held for trading or intended to be held to

maturity, are classified as being available-for-sale investments and are stated at fair value, with any resultant gain or loss on re-measuring

investments being recognized as other component of owners’ equity in owners’ equity. The exception is impairment losses, which is

recognized in the statements of profit or loss and other comprehensive income. When these investments are disposed, the cumulative

gain or loss previously recognized directly in other component of owners’ equity in owners’ equity is recognized in the statements of

profit or loss and other comprehensive income. Where these investments are interest-bearing, interest calculated using the effective

interest method is recognized in the statements of profit or loss and other comprehensive income.

Investments in equity securities which are not marketable are stated at cost, net allowance for impairment (if any).

The fair value of marketable security is based on the latest bid price of the last working day of the year as quoted on the Stock Exchange

of Thailand. The fair value of unit trusts of closed - end fund is determined from their net asset value. The fair value of debentures is

calculated by using the latest bid yield as quoted by the Thai Bond Market Association.


The weighted average method is used for computation of the cost of investments in securities. The first in-first out method is used for

computation of the cost of investments in derivatives.

Impairment

Loss on impairment (if any) of investments is recognized in the statements of profit or loss and other comprehensive income when the

carrying amount exceeds its recoverable value.

3.7 Receivables and payables from/to Clearing House and broker-dealers

Net balances of receivable and payable incurred from settlement of securities and derivatives trading each day through Thailand

Securities Depository Co., Ltd., and net balances of receivable and payable included from settlement of foreign securities trading each

day through foreign securities companies, are presented as net balance receivables or payables from/to Clearing House in accordance

with the Notification of the Office of the Securities and Exchange Commission No. SorTor. 22/2559 regarding “The Forms of Financial

Statements for Securities Companies (No.2)” dated June 2, 2016.

3.8 Securities and derivatives business receivables

Securities and derivatives business receivables are the net balance after deducting allowance for doubtful accounts.

Securities business receivables consist of receivables from securities businesses of cash accounts, margin loans, guarantee deposit

receivables, Securities borrowing and lending receivables and other receivables. Receivables from securities businesses of cash

accounts are the receivables that were derived from cash settlements within 2 working days for equity securities business receivables

and agreed payment for debt securities business receivables, after the securities purchasing date. Margin loans are accounts that

debtors are granted loans for securities purchasing with collaterals at the rate which is not lower than the rate required by the Stock

Exchange of Thailand. Other receivables include overdue securities and derivatives receivables of cash accounts and securities and

derivatives receivables which are the subject of legal proceedings, are undergoing restructuring or are settling in installments.

The allowance for doubtful accounts is based on the assessment of the status of individual debtor and overall debtors as well as the

requirements as stated in the Office of the Securities and Exchange Commission’s Notifications No. KorThor. 33/2543 and KorThor.

5/2544 dated August 25, 2000 and February 15, 2001, respectively. Such assessment takes into consideration various factors including

the risks involved and the value of collateral. Allowance is made for the estimated losses that might be incurred where the debts are

not fully secured and/or there exists a possibility that principal and interest cannot be recovered in full.

Such debt classifications and provisions are in accordance with guidelines by the Office of the Securities and Exchange Commission

as follows:

a) Assets classified as bad debt are to satisfy the following criteria:

1) Loans balances which the subsidiaries has already made every effort to collect, but which remain unpaid and which the

subsidiaries has already written off in accordance with tax law.

2) Loans balances which the subsidiaries has forgiven.

b) Doubtful debt is defined as the uncollateralized portion of the value of a debt which meets the following criteria:

1) General loans, problem financial institution loans, and other loans for which the collateral value is less than the loan balance.

2) Installment loans with repayments scheduled less frequently than every 3 months and for which principal or interest is overdue

by more than 3 months.

3) Installment loans with repayments scheduled over than every 3 months, unless there is clear evidence and a high degree of

certainty that full repayment will be received.

c) Sub-standard debt is defined as the collateralized portion of loans which meet the criteria in b).

Loans classified as bad debt will be written off when identified. Provision will be set aside for loans classified as doubtful at not less

than 100% of the doubtful debt balance.


Borrowing and lending of securities

The Company is engaged in securities borrowing and lending, whereby the Company acts as a principal of the borrowers and lenders

of securities.

The Company records its obligations to return borrowed securities which it has lent as “Payables under securities borrowing and lending

business” in the statement of financial position. At the end of the reporting period, the balance of payables under securities borrowing

and lending business are adjusted based on the latest offer price quoted on the Stock Exchange of Thailand of the last working day of

the year. Gains or losses arising from such adjustment are included in part of profit or loss in the statement of comprehensive income.

The Company records cash paid as collateral for securities borrowing as “Guaranteed deposit receivables”. Fees from borrowing are

recognised on an accrual basis over the term of the lending.

3.9 Investments in subsidiaries and associates

Investments in associates is accounted for in the consolidated financial statements using the equity method.

Investment in subsidiaries and associates is accounted for in the separate financial statements using the cost method less allowance

for impairment loss (if any).

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial

and operating policy decisions of the investee but is not control or joint control over those policies.

Any excess of the cost of acquisition over the carrying amount of the identifiable assets, liabilities and contingent liabilities of an

associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment.

Loss on impairment (if any) of investments in subsidiaries and associates is recognized in the statements of profit or loss and other

comprehensive income.

3.10 Property, premises and equipment

Property is stated at cost. Premises and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any).

Depreciation is charged to the statements of profit or loss and other comprehensive income on a straight-line basis over the estimated

useful lives of each part of an item from the date that premises and equipment are available to use.

The estimated useful lives are as follows:

Premises 20 years

Premises/leasehold improvement 5 years

Furniture and office equipment 3 - 5 years

Vehicles 5 years

Leased assets

Leases in terms of which the Group assumes substantial the risk and rewards of ownership other than legal title are classified as

finance leases. Leased asset acquired by way of finance leases is capitalized at the lower of its fair value and the present value of the

minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses (if any). Lease payments are

apportioned between the finance charges and reduction of the lease liability. Finance charges are charged directly to the statements

of profit or loss and other comprehensive income.


Impairment

Premises and equipment are tested for impairment when indicators of impairment are identified.

Gain and loss on disposals are determined by comparing proceeds with carrying amount and are included in the statements of profit

or loss and other comprehensive income.

3.11 Intangible assets

Intangible assets with definite useful life are stated at cost less accumulated amortization and allowance for impairment (if any).

Amortization is charged to the statements of profit or loss and other comprehensive income on a straight-line basis over the estimated

useful lives of an item from the date that intangible assets with definite useful life are available for use.

The estimated useful lives are as follows:

Using derivatives business fee 1 - 5 years

Computer software 5 - 10 years

Some computer software have an indefinite useful life when there are no foreseeable limit to the period over which the assets are

expected to generate net cash inflows for the Company.

Intangible assets with indefinite useful life are tested for impairment annually or whenever there is an indicators of impairment are

identified, and allowance for impairment is recognized (if any).

3.12 Assetsclassifiedasheldforsale

Assets are classified as assets held for sale if their carrying amount will be recovered principally through a sale transaction rather than

through continuing use, the Group’s management anticipates the sale is highly probable and the assets are available for immediate

sale in its present condition.

Assets held for sale consist of immovable properties which is stated at the lower of cost amount or fair value after deducting costs of sales.

3.13 Leasehold right

Leasehold right is stated at cost less accumulated amortization and allowance for impairment (if any).

Amortization is charged to the statements of profit or loss and other comprehensive income on a straight-line basis over the period of

the lease term.

3.14 Investment property

Investment property is stated at cost less accumulated depreciation and allowance for impairment (if any).

3.15 Securities business payables

Securities business payables are the obligations of the subsidiary in respect of its securities and derivatives businesses with outside parties.

3.16 Derivatives liabilities

Derivative warrants are recorded as liabilities items and the changes in fair value are recorded in the statements of profit or loss and

other comprehensive income. The fair value of derivative warrants is based on the latest offer price of the last working day of the year

as quoted on the Stock Exchange of Thailand.


3.17 Borrowings

Borrowings are recognized initially at fair value of proceeds received. Borrowings are subsequently stated at amortized cost using the

effective yield method any difference between proceeds and the redemption value is recognized in the statements of profit or loss and

other comprehensive income over the period of borrowings.

3.18 Provision for liabilities

The Group recognizes provision as liabilities in the financial statements when the amount of the liability can be reliably estimated and

as commitments when it is likely that loss of resources which are of economic benefit to the Group will result from settlement of such

commitments.

3.19 Financial instruments

Financial instruments carried in the statement of financial position include cash and cash equivalents, current investments, trade and

other current receivables, receivables from Clearing House, securities business receivables, investment held as available for sale, other

long-term investments, trade and other current payables, payables to Clearing House and broker-dealers, debts issued and borrowings,

short-term loan from a subsidiary, debentures, securities business payables. The particular recognition methods adopted are disclosed

in the individual policy statements associated with each item.

3.20 Employeebenefits

3.20.1 Provident fund

The contribution for employee provident fund is recorded as expense when incurred.

3.20.2 Employee benefits obligation

The Group calculated the post-employment benefits obligation under the Thai Labor Protection Act based on actuarial

assumptions at the end of reporting period using Projected Unit Credit Method, which is estimated based on the present value

of expected cash flows of benefits to be paid in the future taken into account the actuarial assumptions, including salaries, turnover

rate, mortality rate, years of service and other factors. Discount rate which calculates the post-employment benefit obligation

based on yield rate of government bond.

The expenses for the defined post-employment benefits plan are recognized as personnel expenses in the statement of profit or

loss and other comprehensive income.

Actuarial gains on defined post-employment benefits are recognized in other comprehensive income (loss).

3.21 Income tax

Income tax expense represents the sum of corporate income tax currently payable and deferred tax.

Current tax

Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits

determined in accordance with tax legislation.

Deferred tax

Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts

at the end of each reporting period, using the tax rates enacted at the end of the reporting period.

The Group recognizes deferred tax liabilities for all taxable temporary differences while they recognize deferred tax assets for all

deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be

available against which such deductible temporary differences and tax losses carried forward can be utilized.


At each reporting date, the Group reviews and reduces the carrying amount of deferred tax assets to the extent that it is no longer

probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.

The Group records deferred tax directly to shareholders’ equity if the tax relates to items that are recorded directly to shareholders’ equity.

3.22 Basic and diluted earnings per share

Basic earnings per share is determined by dividing net income attributable to owners of the Company for the year by the

weighted average number of ordinary shares held by outside parties outstanding during the year. And diluted earnings per share was

calculated based on the weighted average number of ordinary shares on the assumption that all dilutive potential ordinary shares

have been converted to ordinary shares.

3.23 Foreign currency transactions

Transactions during the year denominated in foreign currencies are translated into Baht at rates of exchange on transaction dates.

Monetary assets and liabilities in foreign currencies at the date of the financial statements are converted at the reference exchange

rates established by the Bank of Thailand at that date. Gains or losses on exchange arising on translation and settlement is recognized

as income or expense in the statements of profit or loss and other comprehensive income.

3.24 Fair value measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation

technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if

market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

In addition, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value

measurements are observable and the significance of the inputs to the fair value measurement in its entirely, which are described as

follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the

measurement date.

• Level 2 inputs are inputs, other than quoted prices included within Level 1, which are observable for the asset or liability, either

directly or indirectly.

• Level 3 inputs are unobservable inputs for the asset or liability.

3.25 Significantaccountingjudgementandestimates

The preparation of financial statements in conformity with generally accepted accounting principles also requires the Group’s

management to exercise judgments in order to determine the accounting policies, estimates and assumptions that affect the

reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements

and the reported amounts of revenue and expense during the reporting year. Although these estimates are based on

management’s reasonable consideration of current events, actual results may differ from these estimates. Accounting estimates are

as follows:

3.25.1 Fair value measurements and valuation processes

Some of the Group’s assets and liabilities are measured at fair value for financial reporting purposes. The Group’s

management has to determine the appropriate valuation techniques and inputs for fair value measurements.

In estimating the fair value of an asset or liability, the Group uses market-observable data to the extent it is available.

Where Level 1 inputs are not available, the Group engages third party qualified valuers to perform the valuation. The Group’s


management works closely with the qualified external valuers to establish the appropriate valuation techniques and inputs

to the model and reports the valuation committee’s findings to the board of directors of the Group every quarter to explain

cause of fluctuations in the fair value of the assets and liabilities.

Information about valuation techniques and inputs used in determining the fair value of various assets and liabilities

are disclosed in Note 43.6.

3.25.2 Employee benefit obligations

Past service cost related to the plan amendment is recognized as an expense in the statement of profit or loss and

comprehensive income when the plan amendment is effective.

4. Supplementary disclosures of cash flow information

4.1 Non-cash items are as follows:

During the years ended December 31, 2018 and 2017, the Group recognized gain (loss) on re-measuring investments held as available

for sale and adjustment (surplus) deficit on re-measuring investments held as available for sale disposed during the years - net of tax,

which were presented as addition (deduction) from other component of shareholders’ equity amounting to approximately Baht (116.2)

million and Baht 54.7 million, respectively in the consolidated financial statements and approximately Baht (79.1) million and Baht 98.0

million, respectively in the separate financial statements.

During the year ended December 31, 2017, the Company transferred the investments from investments in associates to investments

held as available for sale which occurred the gain on classified investments amounting to Baht 21.6 million in statements of profit or

loss and other comprehensive income for the year ended December 31, 2017. (see Note 11)

4.2Reconciliationofliabilitiesarisingfromfinancingactivities

Reconciliation of liabilities arising from financing activities for the years ended December 31, 2018 and 2017 in consolidated financial

statements consisted of the following:

Unit: Thousand Baht

CONSOLIDATED FINANCIAL STATEMENT

AS ATJANUARY

1, 2018CASH FLOWS NON-CASH CHANGES

AS ATDECEMBER

31, 2018CASH

RECEIVEDCASH PAID MATURITY RENEWAL AMORTIZED OTHER

Debt issued and borrowings

Bill of exchange 145,000 67,500 - (545,000) 545,000 - - 212,500

Discount on Bill of exchange (785) (6,518) - - - 5,970 - (1,333)

Total 144,215 60,982 - (545,000) 545,000 5,970 - 211,167

Debentures 1,079,800 - - - - - (42,980) 1,036,820

Total 1,224,015 60,982 - (545,000) 545,000 5,970 (42,980) 1,247,987


Reconciliation of liabilities arising from financing activities for the years ended December 31, 2018 and 2017 in separate financial

statements consisted of the following:

Unit: Thousand Baht

SEPARATE FINANCIAL STATEMENT

AS ATJANUARY 1,

2018

CASH FLOWS NON-CASH CHANGES AS ATDECEMBER

31, 2018CASH

RECEIVEDCASH PAID

MATURITY RENEWAL AMORTIZED OTHER

Short-term loan from

a subsidiary 5,000 - - - - - 11,178 16,178

Debentures 1,079,800 - - - - - - 1,079,800

Total 1,084,800 - - - - - 11,178 1,095,978

Unit: Thousand Baht


AS ATJANUARY

1, 2017

CASH FLOWS NON-CASH CHANGES AS ATDECEMBER

31, 2017CASH

RECEIVEDCASH PAID MATURITY RENEWAL AMOR-

TIZEDOTHER

Short-term loan from

a subsidiary 400,000 - (395,000) - - - - 5,000

Debentures - 1,079,800 - - - - - 1,079,800

Total 400,000 1,079,800 (395,000) - - - - 1,084,800

Unit: Thousand Baht


AS ATJANUARY 1,

2017CASH FLOWS NON-CASH CHANGES

AS ATDECEMBER 31,

2017

CASH RECEIVED

CASH PAID MATURITY RENEWAL AMORTIZED OTHER

Debt issued and borrowings

Bill of exchange - 145,000 - (90,000) 90,000 - - 145,000

Discount on Bill of exchange - (2,383) - - - 1,598 - (785)

Total - 142,617 - (90,000) 90,000 1,598 - 144,215

Debentures - 1,079,800 - - - - - 1,079,800

Total - 1,222,417 - (90,000) 90,000 1,598 - 1,224,015


* Deposit accounts for the customers were not shown as assets and liabilities in the financial statements according to the Notification of the Office of the Securities and Exchange Commission.

5. Cash and cash equivalents

Cash and cash equivalents as at December 31, 2018 and 2017 consisted of the following:

6. Investments

6.1 Current investments as at December 31, 2018 and 2017 consisted of the following:



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Cash, short-term deposits and promissory

notes with maturities not later than

3 months from acquisition date 1,810,090,983 1,509,327,486 221,317,567 241,714,556

(Less) Deposits for customers’ account* (1,045,401,491) (272,677,318) - -

Total 764,689,492 1,236,650,168 221,317,567 241,714,556


AS AT DECEMBER 31, 2018 AS AT DECEMBER 31, 2017

COST/AMORTIZED COST FAIR VALUE COST/

AMORTIZED COST FAIR VALUE

BAHT BAHT BAHT BAHT

Trading investments

Equity securities:

Unit trusts 177,348,623 167,603,952 46,514,885 46,396,440

Listed securities 894,562,596 766,686,606 1,124,103,845 1,108,533,194

(Less) Allowance for revaluation (137,620,661) - (15,689,096) -

Total Equity securities 934,290,558 934,290,558 1,154,929,634 1,154,929,634

Debt instruments:

Bond - - 9,946,577 9,946,577

Debentures 2,336,242,428 2,352,060,805 1,880,953,008 1,891,272,385

Add Allowance for revaluation 15,818,377 - 10,319,377 -

Total debt instruments 2,352,060,805 2,352,060,805 1,901,218,962 1,901,218,962

Total trading investments 3,286,351,363 3,286,351,363 3,056,148,596 3,056,148,596

Investments held as available for sale

Equity securities:

Listed securities 2,538,113 2,040,000 16,927,666 14,715,350

(Less) Allowance for revaluation (498,113) - (2,212,316) -

Total investments held as available for sale 2,040,000 2,040,000 14,715,350 14,715,350



The above investments excluded customer’s securities which were deposited with the subsidiary for securities brokerage purpose.

As at December 31, 2018 and 2017, the subsidiary had investments in debt instruments amounting to Baht 139.0 million which the

subsidiary has fully provided allowance for loss on impairment.

Investments with held-to-maturity by remaining period



COST/AMORTIZED COST

COST/AMORTIZED COST

BAHT BAHT

Investments with held-to-maturity

Debt instruments:

Bill of exchange 139,000,000 139,000,000

(Less) Allowance for loss on impairment (139,000,000) (139,000,000)

Total debts instruments - -

Depositsinfinancialinstruments:

Fixed deposit 550,206,063 200,231,033

Deposits with restriction 54,010,000 54,010,000

(Less) Deposits in customers’ account* (550,006,063) (200,001,033)

Total deposits in financial instruments 54,210,000 54,240,000

Total investments with held-to-maturity 54,210,000 54,240,000

Total 3,342,601,363 3,125,103,946


AS AT DECEMBER 31, 2018

LESS THAN 1 YEAR 1 - 5 YEARS OVER 5 YEARS TOTAL

BAHT BAHT BAHT BAHT

Fixed deposits 550,206,063 - - 550,206,063

Deposits with restriction 54,010,000 - - 54,010,000

(Less) Deposits in customers’ account* (550,006,063) - - (550,006,063)

Total 54,210,000 - - 54,210,000





LESS THAN 1 YEAR 1 - 5 YEARS OVER 5 YEARS TOTAL

BAHT BAHT BAHT BAHT

Fixed deposits 200,231,033 - - 200,231,033

Deposits with restriction 54,010,000 - - 54,010,000

(Less) Deposits in customers’ account* (200,001,033) - - (200,001,033)

Total 54,240,000 - - 54,240,000



COST/AMORTIZED COST

FAIR VALUE COST/AMORTIZED COST

FAIR VALUE

BAHT BAHT BAHT BAHT

Trading investments

Equity securities:

Unit trusts 177,348,623 167,603,952 46,514,885 46,396,440


(Less) Allowance for revaluation (37,739,059) - (16,262,348) -

Total Equity securities 364,353,607 364,353,607 344,774,983 344,774,983

Debt instruments:

Bond - - 9,946,577 9,946,577

Debentures 708,641,803 711,041,499 1,009,875,808 1,014,280,999


Total debt instruments 711,041,499 711,041,499 1,024,227,576 1,024,227,576

Total trading investments 1,075,395,106 1,075,395,106 1,369,002,559 1,369,002,559


Equity securities:


(Less) Allowance for revaluation (498,113) - (2,212,316) -

Total Investment held as available

for sale 2,040,000 2,040,000 14,715,350 14,715,350

Total 1,077,435,106 1,383,717,909


6.2 Investments held as available for sale as at December 31, 2018 and 2017 consisted of the following:

As at April 1, 2018, the Company and its subsidiary reclassified its securities from trading investments to investments held as available

for sale due to no planned to sell such investments in the near term. Such reclassification affected to loss on change investments from

trading investments to investments held as available for sale in amount of Baht 24.7 million in the consolidation financial statement

and Baht 8.5 million in the separate financial statement, respectively.



COST/AMORTIZED COST


FAIR VALUE

BAHT BAHT BAHT BAHT


Equity securities:

Unit trusts 74,755,016 80,679,909 67,419,360 69,353,641

Listed securities 1,197,436,583 1,183,361,877 948,202,320 1,061,973,681

Add (Less) Allowance for revaluation (8,149,813) - 115,705,642 -

Total 1,264,041,786 1,264,041,786 1,131,327,322 1,131,327,322



COST/AMORTIZED COST


FAIR VALUE

BAHT BAHT BAHT BAHT


Equity securities:

Listed securities 1,085,637,758 1,109,281,627 861,675,679 985,963,682


Total 1,109,281,627 1,109,281,627 985,963,682 985,963,682


6.3 Other long-term investments as at December 31, 2018 and 2017 consisted of the following;

The subsidiary has investments in companies that have financial position and performance problems as follows:

6.4 Unrealized gain (loss) on re-measuring investments held as available for sale recognized in other component of shareholders’ equity

in shareholders’ equity were as follows:


2018 2017

COST COST

BAHT BAHT

General investments

Equity securities 47,575,314 47,318,514

(Less) Allowance for loss on impairment (41,829,764) (41,829,764)

Total general investments 5,745,550 5,488,750



COST FAIR VALUE ALLOWANCE FOR LOSS ON IMPAIRMENT

COST FAIR VALUE ALLOWANCE FOR LOSS ON IMPAIRMENT

BAHT BAHT BAHT BAHT BAHT BAHT

Ordinary shares 41,829,764 - 41,829,764 41,829,764 - 41,829,764



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Balance at beginning of the years 32,878,735 (21,779,738) 97,660,549 (301,019)

Change during the years

- From re-measuring of investments (129,610,646) 101,379,466 (100,722,917) 122,075,686

- Adjustments relating to the disposal

of (surplus) deficit on re-measuring

investments disposed during the year* 7,469,396 (310,828) 1,792,988 376,274

- Share of profit (loss) on other comprehensive

income of associates (18,498,881) (21,851,442) - -

- Income tax relating to components of

other comprehensive income (loss) 24,428,250 (24,556,881) 19,785,986 (24,490,392)

Non-controlling interests 127,279 (1,842) - -

Balance at end of the years (83,205,867) 32,878,735 18,516,606 97,660,549


6.5 As at December 31, 2018 and 2017, deposits at financial institutions of the subsidiary have been pledged as collateral to banks as

follows:

7. Trade and other current receivables

Trade and other current receivables as at December 31, 2018 and 2017 consisted of the following:

* The above transactions were previously recognized gain (loss) from re-measuring of investments in other comprehensive income in the prior years. Such investments were sold and recognized as gain or loss on investments in the statements of profit or loss and other comprehensive income for the years ended December 31, 2018 and 2017.


2018 2017

BAHT BAHT

Pledged as collateral for over-draft credit limit and borrowing 54,000,000 54,000,000

Others 10,000 10,000

Total 54,010,000 54,010,000



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Guarantee for securities receivables 64,569 64,942 35,108,819 41,533,349

Receivable from sales of securities and derivatives 1,346,263 8,921,147 12,536,060 158,413,735

Prepaid expenses 9,732,144 5,327,554 970,900 751,735

Accrued income 77,351,382 44,125,356 5,429,383 3,668,566

Deposit receivable 284,018 1,224,109 - -

Others 13,519,599 7,844,302 10,837,518 5,461,500

Total 102,297,975 67,507,410 64,882,680 209,828,885


8. Receivables from clearing house and broker-dealers

Receivables from clearing house and broker-dealers as at December 31, 2018 and 2017 consisted of the following:

* Receivables from Clearing House accounts for the customers is not shown as assets and liabilities in the financial statements according to the Notification of the Office of the Securities and Exchange Commission.


2018 2017

BAHT BAHT

Receivables from Clearing House 348,435,568 488,200,069

(Less) Receivables from Clearing House for the customers* (107,048,878) (47,850,636)

Total 241,386,690 440,349,433

9. Securities business receivables

Securities business receivables as at December 31, 2018 and 2017 consisted of the following:


2018 2017

BAHT BAHT


Customers’ cash accounts 325,472,891 266,183,271

Margin loans 522,239,539 362,788,094

Guarantee deposit receivables 401,793,020 71,880,000

Securities borrowing and lending receivables 44,156,500 -

Other receivables

- Receivables under litigation 387,522,473 396,739,119

- Other receivables 554,471 513,182

Total securities business receivables 1,681,738,894 1,098,103,666

(Less) Allowance for doubtful account (359,635,344) (375,779,747)

Total 1,322,103,550 722,323,919


Customers’ cash accounts are classified as normal receivables

As at December 31, 2018 and 2017, the subsidiary have ceased to recognize the interest income from securities approximately Baht 388.1 million and approximately Baht 397.2 million, respectively, which the allowance for doubtful accounts was fully set up for doubtful status in accordance with the Notification of the Office of the Securities and Exchange Commission No. Kor Thor. 33/2543, regarding “The accounting preparation for sub-standard receivables of securities companies” dated August 25, 2000, which is updated by the Notification No. Kor Thor. 5/2544 dated February 15, 2001.

The subsidiary have classified securities business receivables including related accrued interest receivables according with the Notification of the Office of the Securities and Exchange Commission regarding “The accounting preparation for sub-standard receivables of securities company”. Securities business receivables were classified as follows:



SECURITIES BUSINESS

RECEIVABLES AND

ACCRUED INTEREST

RECEIVABLES

ALLOWANCE FOR

DOUBTFULACCOUNTS

SECURITIES BUSINESS

RECEIVABLES

SECURITIES BUSINESS

RECEIVABLES AND

ACCRUED INTEREST

RECEIVABLES

ALLOWANCE FOR

DOUBTFULACCOUNTS

SECURITIESBUSINESS

RECEIVABLES

Normal debts 1,293.6 - 1,293.6 700.9 - 700.9

Substandard debts 28.5 - 28.5 21.4 - 21.4

Doubtful of loss debts 359.6 (359.6) - 375.8 (375.8) -

Total 1,681.7 (359.6) 1,322.1 1,098.1 (375.8) 722.3

Unit: Million Baht

Allowance for doubtful accounts

Allowance for doubtful accounts as at December 31, 2018 and 2017 were as follows:


2018 2017

BAHT BAHT

Balance at beginning of the years 375,779,747 364,827,254

Add (Less) Doubtful Accounts (reversal) (10,248,364) 10,952,493

Bad debt written-off (5,896,039) -

Balance at ending of the years 359,635,344 375,779,747


10. Short-term loan to a subsidiary

As at December 31, 2018, short-term loan to a subsidiary in the separate financial statements was approximately Baht 69.1 million due

at call, carrying interest rate at 6.2% per annum and no collateral.

11. Investments in associates

As at December 31, 2018 and 2017, the Company had investment in associates for using equity method presented in the consolidated

financial statements as follows:

Unit: Million Baht

Unit: Million Baht

Unit: Million Baht

COMPANY’S NAME NATURE OFBUSINESS

COUNTRY OF

INCORPO-RATION

SHAREHOLDING(PERCENTAGE)

EQUITY METHOD COST METHOD

2018 2017 2018 2017 2018 2017

MFC Asset Management

Public Company Limited Mutual fund Thailand 24.96 24.98 507.5 527.7 675.0 675.0

Padaeng Industry Public Metal trading

Company Limited and renewable

energy Thailand 24.99 24.99 1,057.7 1,150.2 827.4 827.4

Total 1,565.2 1,677.9 1,502.4 1,502.4

COMPANY’S NAMEDIVIDENDS

2018 2017

MFC Asset Management Public Company Limited 43.9 47.8

Padaeng Industry Public Company Limited 84.7 56.5

Total 128.6 104.3

Details financial information summarized from the audited financial statements of the associates

The statements of financial position as at December 31, 2018 and 2017 were as follows:

COMPANY’S NAME

PAID-UP SHARE CAPITAL

TOTAL ASSETS TOTAL LIABILITIES

2018 2017 2018 2017 2018 2017

MFC Asset Management

Public Company Limited 125.6 125.5 1,397.3 1,514.0 214.9 251.8

Padaeng Industry

Public Company Limited 2,260.0 2,260.0 6,548.3 7,030.5 2,221.5 2,227.9

Country Group Development

Public Company Limited - 8,266.1(1) - 16,782.3(1) - 10,868.2(1)


The statements of profit or loss and other comprehensive income for the years ended December 31, 2018 and 2017 were as follows:

(1) The Company has investment in Country Group Development Public Company Limited less than 20 percent, but the Company has significant influence because the Company has the representative in the board of directors of such company. Therefore, the Company classified such investment as investment in associate in accordance with TAS 28 (Revised 2017) Investments in Associates and Joint Ventures. On September 21, 2017, the representative of the Company resigned from directors of such company, which caused to the Company has no significant influence. Then, the Company transferred the investments from investments in associate to investments held as available for sale which the Company already recorded gain on classified investments amounting to Baht 21.6 million in statements of profit or loss and other comprehensive income.

Unit: Million Baht

COMPANY’S NAME

TOTAL REVENUES NET INCOME TOTAL COMPREHENSIVE

INCOME (LOSS)

2018 2017 2018 2017 2018 2017

MFC Asset Management Public

Company Limited 913.9 908.6 168.1 142.7 94.7 69.7Padaeng Industry Public Company

Limited 5,026.1 6,332.5 (30.6) 911.0 (31.8) 911.0Country Group Development Public

Company Limited - 1,107.6(1) - (193.4)(1) - (264.3)(1)

12. Investment in subsidiaries

The Company has investment in subsidiaries which are accounted for under the cost method in the separate financial statements as

at December 31, 2018 and 2017 as follows:

COMPANY’S NAME

PERCENTAGE OF SHAREHOLDING (%)

PAID-UP SHARE CAPITAL COST METHOD

2018 2017 2018 2017 2018 2017

Country Group Securities Public

Company Limited 99.3 99.3 2,589.7 2,589.7 3,463.6 3,463.4

Genki Capital Co., Ltd. 100.0 100.0 25.0 25.0 25.0 25.0

Total 3,488.6 3,488.4

Unit: Million Baht

Unit: Million Baht

COMPANY’S NAMEDIVIDENDS

2018 2017

Country Group Securities Public Company Limited - 97.7


13. Property, premises and equipment

Property, premises and equipment as at December 31, 2018 and 2017 consisted of the following:


BALANCEAS AT

JANUARY 1,2018

ADDITIONS DECREASES TRANSFER IN/(TRANSFER OUT)

BALANCEAS AT

DECEMBER 31,2018

BAHT BAHT BAHT BAHT BAHT

Cost :

Property 30,293,000 69,132,000 - - 99,425,000

Premises 19,572,300 - - - 19,572,300

Premises/leasehold improvement 91,001,425 18,575,146 (4,007,282) 980,000 106,549,289

Furniture and office equipment 176,963,202 15,216,668 - - 192,179,870

Vehicles 16,296,038 - - - 16,296,038

Total cost 334,125,965 102,923,814 (4,007,282) 980,000 434,022,497

Accumulated depreciation :

Premises (17,538,441) (343,951) - - (17,882,392)

Premises/leasehold improvement (45,390,318) (14,433,880) 3,654,657 - (56,169,541)

Furniture and office equipment (153,335,372) (11,372,155) - - (164,707,527)

Vehicles (16,296,029) - - - (16,296,029)

Total accumulated depreciation (232,560,160) (26,149,986) 3,654,657 - (255,055,489)

Leasehold improvement during

construction

980,000 - - (980,000) -

Allowance for impairment (1,269,391) - - - (1,269,391)

Total 101,276,414 177,697,617


As at December 31, 2018 and 2017, the subsidiary certain premises and equipment items have been fully depreciated but are still in use.

The original cost, before deducting accumulated depreciation, of those premises and equipment amounted to totaling approximately

Baht 191.0 million and approximately Baht 173.5 million, respectively, in consolidated financial statements.


BALANCEAS AT

JANUARY 1,2017

ADDITIONS DECREASES TRANSFER IN/(TRANSFER OUT)

BALANCEAS AT

DECEMBER 31,2017


Cost :

Property 30,293,000 - - - 30,293,000

Premises 19,572,300 - - - 19,572,300

Premises/leasehold improvement 120,454,634 3,199,140 (32,652,349) - 91,001,425

Furniture and office equipment 199,757,616 4,116,268 (26,910,682) - 176,963,202

Vehicles 21,224,038 - (4,928,000) - 16,296,038

Total cost 391,301,588 7,315,408 (64,491,031) - 334,125,965


Premises (17,194,491) (343,950) - - (17,538,441)

Premises/leasehold improvement (59,264,021) (15,206,693) 29,080,396 - (45,390,318)

Furniture and office equipment (166,926,941) (11,562,421) 25,153,990 - (153,335,372)

Vehicles (21,224,027) - 4,927,998 - (16,296,029)

Total accumulated depreciation (264,609,480) (27,113,064) 59,162,384 - (232,560,160)

Leasehold improvement during construction - 980,000 - - 980,000

Allowance for impairment (1,275,541) - 6,150 - (1,269,391)

Total 125,416,567 101,276,414

Depreciation for the years ended December 31,

2018 Bath 26,149,986

2017 Bath 27,113,064



BALANCEAS AT

JANUARY 1,2018

ADDITIONS DECREASES TRANSFER IN/(TRANSFER

OUT)

BALANCEAS AT

DECEMBER 31,2018


Cost :

Premises/leasehold improvement 12,985,889 - - - 12,985,889

Furniture and office equipment 6,699,052 74,258 - - 6,773,310

Total cost 19,684,941 74,258 - - 19,759,199


Premises/leasehold improvement (3,494,522) (2,598,615) - - (6,093,137)

Furniture and office equipment (2,254,915) (1,367,899) - - (3,622,814)

Total accumulated depreciation (5,749,437) (3,966,514) - - (9,715,951)

Total 13,935,504 10,043,248


BALANCEAS AT

JANUARY 1,2017

ADDITIONS DECREASES TRANSFER IN/(TRANSFER

OUT)

BALANCEAS AT

DECEMBER 31,2017


Cost :

Premises/leasehold improvement 12,985,889 - - - 12,985,889

Furniture and office equipment 6,477,910 221,142 - - 6,699,052

Total cost 19,463,799 221,142 - - 19,684,941


Premises/leasehold improvement (895,953) (2,598,569) - - (3,494,522)

Furniture and office equipment (849,568) (1,405,347) - - (2,254,915)

Total accumulated depreciation (1,745,521) (4,003,916) - - (5,749,437)Total 17,718,278 13,935,504

Depreciation for the years ended December 31,

2018 Baht 3,966,514

2017 Baht 4,003,916


14. Intangible assets

Intangible assets as at December 31, 2018 and 2017 consisted of the following:


USEFUL LIFE BALANCE AS AT

JANUARY 1,2018

ADDITIONS DISPOSALS TRANSFER IN/

(TRANSFER OUT)

BALANCE AS AT

DECEMBER 31, 2018


Cost:

Using derivatives business fee 1 - 5 years 1,541,350 - - - 1,541,350

Computer software 5 - 10 years

and

112,557,984 7,540,097 - 462,802 120,560,883

indefinite

useful life

Securities license - 2,657,500 - - - 2,657,500

Derivative business membership - 15,945,000 - - - 15,945,000

Total cost 132,701,834 7,540,097 - 462,802 140,704,733

Accumulated amortization:

Using derivatives business fee 1 - 5 years (1,541,346) - - - (1,541,346)

Computer software 5 - 10 years (26,329,081) (2,197) - - (26,331,278)

Securities license - - - - - -

Derivative business membership - - - - - -

Total accumulated amortization (27,870,427) (2,197) - - (27,872,624)

Computer software in process 3,999,973 303,866 - (462,802) 3,841,037


Intangible assets 106,603,085 114,444,851


Intangible assets of the subsidiary have an indefinite useful life such as derivative business membership, securities license and computer

software when there is no foreseeable limit to the period over which the assets are expected to generate net cash inflows for the entity.

As at December 31, 2018 and 2017, the subsidiary certain intangible assets have been fully amortized but are still in use. The original

cost, before deducting accumulated amortization, of those intangible assets amounted to totaling approximately Baht 11.3 million.


USEFUL LIFE

BALANCE AS AT

JANUARY 1,2017

ADDITIONS DISPOSALS TRANSFER IN/

(TRANSFER OUT)

BALANCE AS AT

DECEMBER 31, 2017


Cost:

Using derivatives business fee 1 - 5 years 1,541,350 - - - 1,541,350

Computer software 5 years

and

110,798,722 3,902,536 (2,542,419) 399,145 112,557,984

indefinite

useful life

Securities license - 2,657,500 - - - 2,657,500

Derivative business membership - 15,945,000 - - - 15,945,000

Total cost 130,942,572 3,902,536 (2,542,419) 399,145 132,701,834

Accumulated amortization:

Using derivatives business fee 1 - 5 years (1,541,346) - - - (1,541,346)

Computer software 5 years (26,719,658) - 390,577 - (26,329,081)

Securities license - - - - - -

Derivative business membership - - - - - -

Total accumulated amortization (28,261,004) - 390,577 - (27,870,427)

Computer software in process 4,026,196 372,922 - (399,145) 3,999,973


Intangible assets 104,479,469 106,603,085

Amortization for the years ended December 31,

2018 Baht 2,197

2017 Baht -


15. Deferred tax assets/ liabilities

Deferred tax assets/liabilities as at December 31, 2018 and 2017 were as follows:

Movements in Deferred tax assets/liabilities during the years were as follows:



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Deferred tax assets 153,580,457 126,272,408 44,105,748 21,657,115

Deferred tax liabilities (5,151,775) (27,597,747) (4,254,537) (25,891,843)

Deferred tax assets (liabilities) - net 148,428,682 98,674,661 39,851,211 (4,234,728)


BALANCE AS AT

JANUARY 1,

2018

ITEMS AS

RECOGNIZED

INTO

INCOME OR LOSS

ITEMS AS

RECOGNIZED

INTO OTHER

COMPREHENSIVE

INCOME (LOSS)

BALANCE AS AT

DECEMBER 31,

2018

BAHT BAHT BAHT BAHT

Deferred tax assets

Temporary differences

Allowance for doubtful accounts 70,491,411 (2,049,673) - 68,441,738

Allowance for impairment on investments 30,800,000 - - 30,800,000

Loss carry forward income tax 21,300,577 28,436,783 - 49,737,360

Provisions for employee benefits 3,494,438 1,038,117 - 4,532,555

Others 185,982 (117,178) - 68,804

Total 126,272,408 27,308,049 - 153,580,457



(Surplus) deficit on re-measuring investments (27,597,747) (1,982,279) 24,428,251 (5,151,775)

Total (27,597,747) (1,982,279) 24,428,251 (5,151,775)Total 98,674,661 148,428,682



BALANCE AS AT

JANUARY 1,

2017

ITEMS AS

RECOGNIZED

INTO

INCOME OR LOSS

ITEMS AS

RECOGNIZED

INTO OTHER

COMPREHENSIVE

INCOME (LOSS)

BALANCE AS AT

DECEMBER 31,

2017

BAHT BAHT BAHT BAHT

Deferred tax assets


Allowance for doubtful accounts 68,300,912 2,190,499 - 70,491,411

Allowance for impairment on investments 30,800,000 - - 30,800,000

Loss carry forward income tax - 21,300,577 - 21,300,577

Provisions for employee benefits 2,586,058 908,380 - 3,494,438

Others 186,663 (681) - 185,982

Total 101,873,633 24,398,775 - 126,272,408



(Surplus) deficit on re-measuring investments 1,858,216 (4,899,081) (24,556,882) (27,597,747)

Total 1,858,216 (4,899,081) (24,556,882) (27,597,747)Total 103,731,849 98,674,661


BALANCE AS AT

JANUARY 1,

2018

ITEMS AS

RECOGNIZED

INTO

INCOME OR LOSS

ITEMS AS

RECOGNIZED

INTO OTHER

COMPREHENSIVE

INCOME (LOSS)

BALANCE AS AT

DECEMBER 31,

2018

BAHT BAHT BAHT BAHT

Deferred tax assets


Loss carry forward income tax 21,300,578 22,060,613 - 43,361,191

Provisions for employee benefits 317,219 429,877 - 747,096

Others 39,318 (41,857) - (2,539)

Total 21,657,115 22,448,633 - 44,105,748



(Surplus) deficit on re-measuring investments (25,891,843) 1,851,320 19,785,986 (4,254,537)

Total (25,891,843) 1,851,320 19,785,986 (4,254,537)Total (4,234,728) 39,851,211


16. Other non-current assets

Other non-current assets as at December 31, 2018 and 2017 consisted of the following:

As at December 31, 2018 and 2017, such investment property - net is mortgaged as collateral for credit facility from a local financial

institution.

The Company and its subsidiaries used a tax rate of 20% for calculation of deferred tax for the years ended December 31,

2018 and 2017.


BALANCE AS AT

JANUARY 1,2017

ITEMS ASRECOGNIZED

INTOINCOME OR LOSS

ITEMS ASRECOGNIZEDINTO OTHER

COMPREHENSIVEINCOME (LOSS)

BALANCE AS ATDECEMBER 31,

2017

BAHT BAHT BAHT BAHT

Deferred tax assets


Loss carry forward income tax - 21,300,578 - 21,300,578

Provisions for employee benefits 75,182 242,037 - 317,219

(Surplus) deficit on re-measuring investments 75,255 - (75,255) -

Others - 39,318 - 39,318

Total 150,437 21,581,933 (75,255) 21,657,115



Surplus on re-measuring investments - (1,476,705) (24,415,138) (25,891,843)

Total - (1,476,705) (24,415,138) (25,891,843)Total 150,437 (4,234,728)



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Clearing fund 63,842,029 57,436,612 - -

Advance receivables 90,134 90,477 - -Investment property - net 22,766,779 24,066,779 - -Deposits 11,289,563 8,625,701 1,442,882 1,442,882Witholding tax receivables 8,871,012 - - -Others 4,638,232 322,153 - -Total 111,497,749 90,541,722 1,442,882 1,442,882


17. Trade and other current payables

Trade and other current payables as at December 31, 2018 and 2017 were as follows:

18. Payables to clearing house and broker-dealers

Payables to Clearing House and broker-dealers as at December 31, 2018 and 2017 consisted of the following;

19. Securities business payables

Securities business payables as at December 31, 2018 and 2017 consisted of the following;



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Trade payables 13,576,822 6,777,026 912,930 2,476,656

Securities payable - 1,529,424 19,827,099 73,895,782

Accrued bonuses 27,764,707 35,276,686 8,608,480 12,808,070

Accrued marketing incentive 1,697,012 873,570 - -

Accrued profit sharing from branches/

marketing teams management 22,532,660 34,543,213 - -

Withholding tax and specific business tax payable 6,224,912 3,785,042 3,101,177 1,460,722

Value-added-tax payable 3,307,246 2,460,706 - -

Other payables 8,713,596 5,516,795 6,590,794 1,342,453

Unearned revenue 8,000,000 - - -

Accrued other expenses 32,905,348 23,959,859 10,812,308 21,319,512

Total 124,722,303 114,722,321 49,852,788 113,303,195


2018 2017

BAHT BAHT

Payables to clearing house 246,173,586 -


2018 2017

BAHT BAHT

Payables under cash accounts 1,321,548,282 1,206,643,110

Payables under securities borrowing and lending business 308,457,000 49,170,256

Total 1,630,005,282 1,255,813,366


20. Debts issued and borrowings

Debts issued and borrowings as at December 31, 2018 and 2017 consisted of the following:

21. Short-term loan from a subsidiary

As at December 31, 2018 and 2017, short-term loan from a subsidiary in the separate financial statements was approximately Baht

16.2 million and approximately Baht 5.0 million, respectively due at call, carrying interest rate at 3.0% per annum and no collateral.

22. Debentures

On December 1, 2017, the Company issued approximately Baht 1,079.80 million unsubordinated and unsecured debentures in regis-

tered name form and unsecured debentures with debenture holder’s representative, which had the objective to increase the Company

investment. Debenture was fully repayable on June 1, 2020, which bear interest at the fixed rate of 6.25% per annum. Interest payment

term which be paid every three-month on March 1, June 1, September 1, and December 1 of each year through the terms of debenture.

These debenture was registered with the Thai Bond Market Association and the Stock Exchange of Thailand on December 1, 2017.



INTEREST RATE PER ANNUM

(PERCENT)

REMAINING PERIODS TO MATURITY

WITHIN 1 YEAR 1 - 5 YEARS TOTAL

BAHT BAHT BAHT


Bill of exchange 3.1 - 3.5 211,166,928 - 211,166,928

Total 211,166,928 - 211,166,928



INTEREST RATE PER ANNUM

(PERCENT)

REMAINING PERIODS TO MATURITY

WITHIN 1 YEAR 1 - 5 YEARS TOTAL

BAHT BAHT BAHT


Bill of exchange3.2 - 3.5 144,215,456 - 144,215,456

Total144,215,456 - 144,215,456


Amounts recognized in the statement of profit or loss and other comprehensive income for post-employment benefits for the years

ended December 31, 2018 and 2017 were as follows:

Movements in the present value of the post-employment benefits obligation for the years ended December 31, 2018 and 2017 were

as follows:

23. Provisions for employee benefits

The Company and its subsidiaries operates post-employment benefits plan under the Thai Labor Protection Act, which were considered

as unfunded defined benefit plans.

Provisions for employee benefits as at December 31, 2018 and 2017 were as follows:



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Post-employment benefit obligations 22,662,774 17,472,190 3,735,480 1,586,097

Total 22,662,774 17,472,190 3,735,480 1,586,097



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Current service cost 7,267,107 4,985,963 2,094,032 1,197,066

Interest cost 522,387 415,936 55,351 13,120

Components of employee benefit costs

recognized in profit or loss 7,789,494 5,401,899 2,149,383 1,210,186

Total 7,789,494 5,401,899 2,149,383 1,210,186



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Beginning balance of employee

benefits obligation 17,472,190 12,930,291 1,586,097 375,911

Current service cost 7,267,107 4,985,963 2,094,032 1,197,066

Interest cost 522,387 415,936 55,351 13,120

(Less) Employee benefits paid during the years (2,598,910) (860,000) - -

Balance at end of the years 22,662,774 17,472,190 3,735,480 1,586,097


The principle actuarial assumptions used to calculate the obligation under the defined benefits plan as at December 31, 2018 and

2017 were as follows:



2018 2017 2018 2017

(% P.A.) (% P.A.) (% P.A.) (% P.A.)

Financial assumptions

Discount rate 2.9 - 3.5 3.0 - 3.5 3.5 3.5

Employee turnover 0 - 24.0 0 - 24.0 0 - 20.0 0 - 20.0

Subject to the

range of age

of employees

Subject to the

range of age

of employees

Subject to the

range of age

of employees

Subject to the

range of age

of employees

Expected rate of salary increase 0 - 5.0 0 - 5.0 0 - 5.0 0 - 5.0

Significant actuarial assumptions for the determination of the Provisions for employee benefits are discount rate, expected salary increase

rate and mortality rate. The sensitivity analyses below have been determined based on reasonably possible changes of the respective

assumption occurring at the end of the reporting period, while holding all other assumptions constant.

Impact on the Provisions for employee benefits increases (decreases) as at December 31, 2018 and 2017 were as follows:



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Discount rate - increase by 1% (2,145,132) (1,719,427) (218,049) (132,964)

Discount rate - decrease by 1% 2,485,175 1,994,453 264,370 162,033

Salary increase rate - increase by 1% 2,946,478 2,140,618 337,190 176,134

Salary increase rate - decrease by 1% (2,564,875) (1,871,275) (286,122) (147,413)

Life expectancy - increase by 1 year 179,920 142,078 17,925 10,558

Life expectancy - decrease by 1 year (178,288) (140,779) (17,695) (10,421)


The sensitivity analysis presented above may not be representative of the actual change in the Provisions for employee benefits as

it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the Provisions for employee benefits have been

calculated using the Projected Unit Credit Method at the end of the report period, which is the same as that applied in calculating the

post-employment benefit obligations liability recognized in the statement of financial position.

On December 13, 2018, the National Legislative Assembly passed a resolution approving the draft of a new Labor Protection Act,

which is in the process of being announced in the Royal Gazette. The new Labor Protection Act stipulates additional legal severance

pay rates for employees who have worked for an uninterrupted period of twenty years or more. Such employees are entitled to receive

compensation of not less than that of the last 400 days, based on the final wage rate. This change is considered an amendment to

post-employment benefits plan. The Company and its subsidiaries will reflect the effect of such change by recognizing past service

cost as an expense in the statement of profit or loss and other comprehensive income of the period in which the law is effective.

24. Share capital

Country Group Holdings Public Company Limited was established under the business restructuring plan of the Country Group Securities

in order to engage in the business of investment and to hold the shares of the Country Group Securities. The Company had made a

tender offer for all the securities of the Country Group Securities by exchanging them for the securities of the same type of the Company,

with the exchange rate of 1 ordinary share of the Country Group Securities per 1 ordinary share of the Company.

On May 6, 2014, the Statutory Meeting passed a resolution to have the Company’s authorized capital 10,000 shares at the par value of

Baht 1.00 per share and initially pay for paid-up share capital in the amount of Baht 10,000. On May 15, 2014, the Company registered

the authorized capital at the department of Business Development of the Ministry of Commerce. As the result, the Company’s authorized

and issued and paid-up share capital were 10,000 shares at the par value of Baht 1.00 per share, amounting in total to Baht 10,000.

On June 12, 2014, the Extraordinary General Shareholders’ Meeting No. 1/2014 passed resolutions to approve the following:

1. Approval of the business restructuring plan, and other related actions and making a tender offer for all the securities of Country

Group Securities according to the business restructuring plan. And also, the Board of Director or Executive Committee or the

person authorized by the Board of Director or Executive Committee are authorized to take any actions in order to complete the

business restructuring plan.

2. Approval the issuance of the warrants to buy ordinary shares of the Company to the existing shareholders by the proportion

of the amount of shares held by each shareholder in accordance with the business restructuring plan which are the shareholders

who have exchanged their shares in process of a tender offer for all the securities of Country Group Securities. The Company will

issue the warrants in the amount not exceeding 863,247,828 units to the existing shareholders whose names appear in the share

register book as the date which will be specified by the Board of Directors and/or the Executive Committee or the person authorized

by the Board of Director or the Executive Committee and that specify date should be the day after the end of tender offer period

and the Company has registered the increase of paid-up share capital with the Ministry of Commerce. The Company will issue the

proportion of 3 swapped ordinary shares per 1 unit of warrant, free of charge, and fraction will be rounded down. In exercising the

right of the warrants, 1 unit of warrant is eligible for buying 1 ordinary share of the Company at the exercise price Baht 1.80 per

share.

3. Approval the increase in the authorized share capital of the Company Baht 4,052,991,312 from the existing authorized share

capital of Baht 10,000 to Baht 4,053,001,312 by issuing 4,052,991,312 shares, at the par value of Baht 1.00 per share to reserve

for the tender offer and the exercise of the warrants to buy ordinary shares of the Company in accordance with CGH-ESOP 1 and

for the exercise of warrants that are issued to existing shareholders of the Company in accordance with the business restructuring

plan.


4. Approval to allocate new ordinary shares of the Company accordance with the resolution of the meeting to increase the

authorized share capital of the Company Baht 4,052,991,312 by issuing of 4,052,991,312 new ordinary shares at the par value

of Baht 1.00 per share as follows:

4.1. To allocate not exceeding 2,589,743,484 new ordinary shares for payment share subscription to the shareholders of Country

Group Securities in the proportion of 1 new ordinary share of the Company at the par value of Baht 1.00 per share to 1 share

of Country Group Securities at the par value of Baht 1.00 per share without paying cash.

4.2. To allocate not exceeding 600,000,000 new ordinary shares at the par value of Baht 1.00 per share, in order to reserve for

the exercise of the warrants that are issued and offered to directors, managements, employees and/or advisors of the

Company and Country Group Securities at the exercise price Baht 1.80 per share in accordance with CGH-ESOP1.

4.3. To allocate not exceeding 863,247,828 new ordinary shares at the par value of Baht 1.00 per share, in order to reserve for the

exercise of the warrants that are issued to existing shareholders of the Company by the proportion in the amount of shares

held by each shareholder at the exercise price Baht 1.80 per share.

On October 17, 2014, the Office of The Securities and Exchange Commission allow the Company to make a tender offer for all the

securities of the Country Group Securities.

On December 25, 2014, the Company reported that as a result of the tender offer, the Company had acquired 2,566,219,121 shares

or 99.1% of the total number of paid up shares of Country Group Securities by exchanging them for the securities of the same type of

the Company. As a result, the Company is the major shareholder of the Country Group Securities. In addition, the ordinary shares of

the Company is the securities listed on the Stock Exchange in place of the ordinary shares of the Country Group Securities which is

simultaneously delisted from being the securities listed on the Stock Exchange on January 8, 2015.

On January 6, 2015, the Company allocated warrants of the Company (CGH-W1) 855,408,275 units to the existing shareholders whose

names were in the share registration book from December 30, 2014 to January 5, 2015, and the warrants have been listed on the Stock

Exchange since February 13, 2015. Trading commencement is on February 16, 2015.

On January 8, 2015, the ordinary shares of the Company were the securities listed on the Stock Exchange in place of the ordinary

shares of the Country Group Securities which were simultaneously delisted from being the securities listed on the Stock Exchange.

On March 11, 2015, the Extraordinary General Meeting of Shareholders No. 1/2015 passed resolutions to approve the following:

1. Approve the decrease of the registered capital of the Company by the amount of Baht 31,363,916 from the existing registered

capital of Baht 4,053,001,312 to Baht 4,021,637,396 by canceling the unissued shares by the amount of 31,363,916 shares, at the

par value of Baht 1.00 per share, which are shown as following detail;

1.1 The remaining shares from allocation for the payment to the shareholders of the Country Group Securities in tender offer at the

amount of 23,524,363 shares.

1.2 The remaining shares from allocation to reserve for the rights to exercise the warrants that are issued to the existing shareholders

of the Company at the amount of 7,839,553 shares.

2. Approval the increase in the registered capital of the Company, by issuing the amount of Baht 2,566,229,121 from the existing

registered capital of Baht 4,021,637,396 to Baht 6,587,866,517 by issuing of 2,566,229,121 newly ordinary shares, at the par value

of Baht 1.00 per share to accommodate the allocation of newly issued ordinary shares to the shareholders proportionate to their

shareholding (Right offering) and specific person and/or institution investor and/or other investors (Private Placement).

On March 23, 2015 The Company has registered the decrease in registered capital in the amount of Baht 31,363,916 and the

increase in the registered capital in the amount of Baht 2,566,229,121 at the Department of Business Development of the Ministry of

Commerce, making the registered capital of the Company to 6,587,866,517 shares at the par value of Baht 1.00 per share, amounting

in total to Baht 6,587,866,517.


3. Approval the allocation of the newly issued ordinary shares of the Company by issuing of 2,566,229,121 newly issued ordinary

shares at the par value of Baht 1.00 per share to the existing shareholders proportionate to their shareholding (Right Offering), in the

ratio of 1 existing ordinary share per 1 new ordinary share, at the offering price Baht 1.30 per share. The existing shareholders shall

not subscribe in excess of their allocated shares and in the case where there are remaining shares from the allocation as

abovementioned, the Company will allocate and offer the shares remaining to specific person and/or Institution Investor and/or other

investors (Private Placement) at the price which will not be lower than Baht 1.66. The offering period shall be done within 12 months

after the date that the Extraordinary General Meeting of Shareholders No.1/2015 resolves to issue and offer the newly ordinary

shares. It shall be whether single or sequential allocation depends on the suitability of money market and capital market.

On April 29, 2015, The Annual General Shareholders’ Meeting for the year 2015 passed resolutions to approve the following:

1. Approval the ESOP warrants program CGH-ESOP1 and issuance and offering of warrants to purchase the ordinary shares of the

Company to the directors, executives, employees and/or advisors of the Company and/or the Country Group Securities under ESOP

warrants program CGH-ESOP1.

2. Approval an issuance of warrants to buy ordinary shares of the Company No.2 (CGH-W2) to allocate to the existing shareholders

of the Company. The Company will issue the warrants in the amount not exceeding 427,704,853 units to the existing shareholders

of the Company whose name are in the share register book on the record date, determined by the Company’s Board of Directors.

The record date shall be the day after the accomplishment of the issuance and offering of newly issued shares to existing

shareholders proportionate to their shareholding (Right Offering) and the amendment of the Company’s registered capital with the

Ministry of Commerce. The Company will issue the warrants to the existing shareholders in the ratio of 12 existing shares per 1 unit

of warrant, free of charge, and fraction thereof will be rounded down. 1 unit of warrant has the right to purchase 1 new ordinary

share with the exercise price of Baht 1.60.

3. Approval the decrease of the registered capital of the Company in the amount of Baht 2,566,229,121 from the existing registered

capital of Baht 6,587,866,517 to Baht 4,021,637,396 by canceling the unissued shares of the Company at the amount of 2,566,229,121

shares, at the par value of Baht 1.00 per share. According to Section 136 of the Public Limited Companies Act B.E. 2535

(as amended) states that the Company will be entitled to increase its registered capital only after all of its shares have been issued

and the corresponding payment of shares has been made, or in case of some shares still remain unissued, those shares must be

reserved for the convertible debentures or warrants. As such, since the Company has already registered the increase of

capital according to the resolution of the Extraordinary General Meeting of Shareholders No.1/2015 at the Ministry of Commerce,

the registered capital of the Company will be Baht 6,587,866,517 divided into 6,587,866,517 shares, for which 2,566,229,121 shares

are unissued and not for accommodating the convertible debentures or warrants (these shares are for the offer for sale of RO).

The Company is unable to proceed to increase its registered capital in the amount of Baht 427,704,853 immediately as it is not in

compliance with Section 136 of the Public Limited Companies Act B.E. 2535 (as amended) but the Company must proceed to reduce

its registered capital by canceling the unissued shares prior to doing so.

4. Approval the increase of the registered capital of the Company to accommodate the newly issued ordinary shares according to the

resolutions of the Extraordinary General Meeting of Shareholders No. 1/2015 with the amount of Baht 2,566,229,121 and the exercise

of warrants (CGH-W2) offered to the existing shareholders with the amount of Baht 427,704,853, which total is Baht 2,993,933,974.

Therefore, the company shall increase its registered capital from Baht 4,021,637,396 to Baht 7,015,571,370, by issuing 2,993,933,974

newly issued ordinary shares at the par value of Baht 1.00 per share.

5. Approval the allocation of the newly issued ordinary shares of the Company in the amount not exceeding 2,993,933,974 newly issued

ordinary shares at the par value of Baht 1.00 per share by allocating in the amount not exceed 2,566,229,121 newly issued ordinary

shares to the existing shareholders proportionate to their shareholding (Right Offering). Besides, in the case which there are

remaining shares from the allocation, the Company will allocate and offer the shares remaining to specific person and/or Institution

Investor and/or other investors (Private Placement). The details of the abovementioned was approved by the Extraordinary

General Meeting of Shareholders No. 1/2015 on March 11, 2015 and the allocation of the newly issued ordinary shares in the amount not

exceeding 427,704,853 newly issued ordinary shares to accommodate the exercise of warrants (CGH-W2) offered to the existing

shareholders proportionate to their shareholding.


Moreover, On April 29, 2015, The Annual General Shareholders’ Meeting for the year 2015 passed a resolution to approve the allocation

of 2,566,229,121 newly issued ordinary shares at the par value of Baht 1.00 per share to the existing shareholders proportionate to

their shareholding (Right Offering), in the ratio of 1 existing ordinary share per 1 new ordinary share, at the offering price Baht 1.30 per

share. Due to the offered price of new ordinary share is lower than 90 percent of the market price per share of the Company’s ordinary

shares (weighted average market price per share of the Company’s ordinary share during a period of 7 consecutive business days

prior to the first day that the SET post an XR sign is Baht 1.616 per share), therefore, the Company has to adjust the exercise ratio and

exercise price for the warrants CGH-W1 to comply with the condition for the right adjustment. The new exercise ratio is 1 unit of warrant

to purchase 1.108 ordinary shares at the exercise price of Baht 1.624 per share to be effective on May 7, 2015 onwards.

The last day for the subscription of the newly issued ordinary shares of the Company is on May 28, 2015. The existing shareholder

subscribed for new ordinary shares in the amount of 1,770,539,157 shares at the offering price of Baht 1.30 per share, totalling Baht

2,301,700,904. The Company has already registered the increase in paid up capital from Baht 2,566,229,121 to Baht 4,336,768,278

with the Ministry of Commerce on June 9, 2015. The newly issued ordinary shares of the Company were listed on the Stock Exchange

and start trading on June 24, 2015.

On July 15, 2015, the Company has allocated the warrants to purchase the newly issued ordinary shares of the Company no.2 (CGH-W2)

in the amount of 361,367,269 units to the existing shareholders of the Company whose name appeared on the date for closing of the

Company’s share registration on July 8, 2015. The Stock Exchange has approved such warrants to purchase the newly issued ordinary

shares of the Company as listed securities and trading date started on August 24, 2015.

On April 29, 2016, the Annual General Shareholders’ Meeting for the year 2016 passed resolutions to approve the following:

1. The decrease of Company’s registered capital from the existing registered capital of Baht 7,015,571,370 to Baht 5,553,543,822

by eliminating the unsubscribed ordinary shares in total of 1,462,027,548 shares with the par value of Baht 1.00.

2. For issuing and offering the newly ordinary share in total of 92,384,094 shares, with the par value of Baht 1.00, in order to issue in

accommodation to exercise of the warrant to purchase the ordinary share of the Company (CGH-W1).

3. For issuing and offering of the newly ordinary shares of the Company under General Mandate, in amount of 430,000,000 shares with

the par value Baht 1.00 by issuing and offering the ordinary share for Private Placement. The meeting granted the Board of Directors

empower to define the condition and details related to the offering share such as person who will be allotment, offering price,

number of issuing and offering ordinary shares such as determine the purpose, offering price and conditions in order to maintain

the best benefit of the Company regarding to the right and fair treatment of the shareholders. In this regards, to authorize the Board

of Directors and/or the authorized person who appointing by Board of Directors empower to perform and empower to consider

and execute on any related documentation and authorized to conduct the necessary and appropriated relevant to the offering the

newly share, including to provide information and submitting the evidence to related agency. Additional, to perform any transaction

as approved by the meeting with the votes more than three-fourths of the total number of votes of the shareholders.

4. The increase of the Company’s registered capital from the existing registered capital of Baht 5,553,543,822 to Baht 6,075,927,916

by issuing 522,384,094 newly issued ordinary shares with a par value of Baht 1.00 per share.

5. The cancellation of the warrants to purchase the Company’s ordinary shares to director, executives, employees and/or the advisors

of the Company and its Subsidiaries (CGH-ESOP1).

On January 5, 2018, the existing shareholder subscribed for new ordinary shares in the amount of 122,475 units as the warrant ratio 1 :

1.108 at the price of Baht 1.624 per share, totalling Baht 220,372. The Company has already registered the increase in paid up capital in

amount of Baht 135,697 that increase from Baht 4,336,768,278 to Baht 4,336,903,975 with the Ministry of Commerce on January 17, 2018.

On April 27, 2018, the Annual General Shareholders’ Meeting for the year 2018 passed resolutions to approve the following:

1. The decrease of Company’s registered capital from the existing registered capital of Baht 6,075,927,916 to Baht 4,698,271,244 by

eliminating the unsubscribed ordinary shares in total of 1,377,656,672 shares with the par value of Baht 1.


2. For issuance and offering of warrants to purchase the Company’s ordinary shares No.3 (CGH-W3) in the amount not exceeding

1,445,634,658 units, to the existing shareholders and approve the Board of Directors to determine criteria, conditions, and other

details related to the Warrants. The board of directors shall also be empowered to negotiate and sign in any relevant documents

and agreements and perform any other necessary actions related to the Warrants including the issuance and offering, listing the

reserved ordinary shares from the exercise of Warrants on the Stock Exchange of Thailand (SET), as well as to proceed for the

necessary approval from relevant authorities.

3. The increase of the Company’s registered capital from the existing registered capital of Baht 4,698,271,244 to Baht 6,143,905,902

by issuing the newly issued ordinary shares 1,445,634,658 shares with a par value of Baht 1 per share to reserve for the exercise

right of Warrants to purchase the ordinary share of the Company (CGH-W3).

On July 13, 2018, the existing shareholder subscribed for new ordinary shares in the amount of 2,396 units as the warrant ratio 1: 1.006

at the price of Baht 1.59 per share, totalling Baht 3,830. The Company has already registered the increase in paid up capital in amount

of Baht 2,409 that increase from Baht 4,336,903,975 to Baht 4,336,906,384 with the Ministry of Commerce on July 18, 2018.

The weighted average number of ordinary shares for the years ended December 31, 2018 and 2017, is calculated as follows:

25. Share premium

The premium on share capital account is set up under the provisions of Section 51 of the Public Companies Act B.E. 2535, which

requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account

(“premium on share capital”). Premium on share capital is not available for dividend distribution.

26. Capital management

The Company and its subsidiaries’ objectives in managing capital are to safeguard the Company and its subsidiaries’ ability to continue

as a going concern in order to provide returns for shareholder and benefits for other stakeholders and to maintain an optimal capital

structure.



2018 2017 2018 2017

SHARES SHARES SHARES SHARES

Number of ordinary shares

outstanding as at January 1, 4,336,758,428 4,336,758,428 4,336,768,278 4,336,768,278

Weighted average number

of increased shares during the years 130,472 - 130,472 -

Weighted average number of ordinary shares

for the years 4,336,888,900 4,336,758,428 4,336,898,750 4,336,768,278


27. Dividends paid

On April 26, 2017, the Annual General Shareholders’ Meeting for the year 2017 of the subsidiary passed resolutions to approve the

annual dividend payment for the year 2016 at the rate of Baht 0.038 per share, totaling Baht 98,401,320 and appropriated retained

earnings as statutory reserve in the amount of Baht 4,486,717. The subsidiary company had already made an annual dividend payment

on May 19, 2017.

On April 27, 2017, the Annual General Shareholders’ Meeting for the year 2017 of the Company passed resolutions to approve the annual

dividend payment for the year 2016 at the rate of Baht 0.02774 per share, totaling Baht 120,301,952, and appropriated retained earnings

as statutory reserve in the amount of Baht 15,035,013. The Company had already made an annual dividend payment on May 25, 2017.

On April 27, 2018, the Annual General Shareholders’ Meeting for the year 2018 of the Company passed resolutions to approve the annual

dividend payment for the year 2017 at the rate of Baht 0.035 per share, totaling Baht 151,789,753 and appropriated retained earnings

as statutory reserve in the amount of Baht 6,315,716. The Company had already made an annual dividend payment on May 25, 2018.

28. Statutory reserve

The Company is required to set aside a statutory reserve at least 5% of its net income after deducting accumulated deficit brought

forward (if any) until the reserve reaches 10% of the authorized share capital according to the Public Limited Companies Act B.E. 2535,

section 116. The statutory reserve could not be used for dividend payment.

29. Brokerage fees

Brokerage fees for the years ended December 31, 2018 and 2017 consisted of the following:


2018 2017

BAHT BAHT

Brokerage fees from securities business 218,279,985 205,854,982

Brokerage fees from derivatives business 81,890,952 8,364,955

Total 300,170,937 214,219,937

30. Fees and services income

Fees and services income for the years ended December 31, 2018 and 2017 consisted of the following:


2018 2017

BAHT BAHT

Underwriting fee 55,680,970 20,808,360

Financial advisory fee 17,476,010 28,198,094

Investment advisory fee 227,066 308,110

Securities borrowing and lending fee 52,832 -

Others 2,187,061 2,816,524

Total 75,623,939 52,131,088


31. Interest and dividend income

Interest and dividend income for the years ended December 31, 2018 and 2017 consisted of the following:

32. Gain on investments and derivatives

Gain on investments and derivatives for the years ended December 31, 2018 and 2017 consisted of the following:



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Interest income 53,012,381 29,097,468 24,967,902 2,841,929

Dividend income 53,128,956 30,415,843 140,427,752 214,929,026

Total 106,141,337 59,513,311 165,395,654 217,770,955



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Gain (loss) on investments

Unrealized gain (loss) on re-measuring trading investments (74,214,182) 800,047 (19,397,013) (4,523,853)

Gain (loss) on sale of trading investments (77,200,951) 284,434,638 (3,904,710) 68,482,573

Gain on sale of investment held as available for sale 75,459,271 3,607,448 75,007,362 200,527

Loss from impairment on general investments (24,653,794) - (8,506,003) -

Total gain (loss) on investments (100,609,656) 288,842,133 43,199,636 64,159,247

Gain (loss) on derivatives

Gain (loss) on derivatives 156,803,537 (68,095,410) (15,593,723) 12,961,584

Total 56,193,881 220,746,723 27,605,913 77,120,831


34. Key management benefit expenses

Benefits expenses to management of the Company and its subsidiaries both monetary and non-monetary were presented as part of

“Employee benefits expenses”.

Management benefit expenses for the years ended December 31, 2018 and 2017 consisted of the following;

33. Other incomes

Other incomes for the years ended December 31, 2018 and 2017 consisted of the following:



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Gain on disposal assets - 2,366,262 - -

Income from the overdue payment charge 48,161 74,204 - -

Gain on exchange rate 1,675,194 - 1,675,194 -

Others 13,633,780 22,505,130 763,564 504,072

Total 15,357,135 24,945,596 2,438,758 504,072



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Short term employee benefits 65,773,596 68,223,702 30,211,319 33,562,113

Post-employment benefits 2,453,783 1,687,029 1,776,127 1,159,989

Total 68,227,379 69,910,731 31,987,446 34,722,102

35. Directors’ remuneration

Directors’ remuneration represents the benefits paid to the Company and its subsidiaries’ directors in accordance with Section 90 of the

Public Limited Companies Act, exclusive of salaries and related benefits payable to directors who hold executive position. Directors’

remuneration was approved by the ordinary shareholders’ meeting of the Company and its subsidiaries.


36. Other expenses

Other expenses for the years ended December 31, 2018 and 2017 consisted of the following:

37. Provident fund

On November 1, 2002 and July 14, 2014, the Company and its subsidiaries set up a provident fund for those employees who elected

to participate. The contributions from the employees are deducted from their monthly salaries, and the Company and its subsidiaries

matches the individuals’ contributions. At the present, the provident fund is managed by MFC Asset Management Public Company

Limited, authorized financial institution in accordance with the Provident Fund Act B.E. 2530 (1987).

For the years ended December 31, 2018 and 2017, the Company and its subsidiaries has contributed approximately Baht 7.7 million

and approximately Baht 6.5 million, respectively, to the fund.

38. Income tax

Income tax for the years ended December 31, 2018 and 2017 were as follows:



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Property, premises and equipment expense 82,473,859 77,590,586 11,829,211 11,424,815

Professional and other fees 19,143,926 27,143,438 4,463,079 12,726,920

Information and communication expenses 20,512,344 18,653,379 765,160 180,484

Advertising and promotion expenses 5,340,426 13,987,212 1,698,679 9,945,065

Entertainment expenses 15,565,788 8,271,516 2,385,213 2,744,971

Gasoline and travelling expenses 6,776,821 4,866,097 2,781,917 1,374,202

Stationery and office supplies 1,926,783 1,843,457 379,666 448,979

Taxes and duties 1,559,997 1,304,678 39,193 5,644

Loss on exchange rate 37 30,656,390 - 30,479,697

Loss on sale of assets 352,625 - - -

Others 5,940,307 7,758,514 1,491,710 3,436,855

Total 159,592,913 192,075,267 25,833,828 72,767,632



2018 2017 2018 2017

Current income tax for the years - 7,811 - -

Deferred tax (25,399) (19,499) (24,300) (20,105)

Total income tax (income) expenses (25,399) (11,688) (24,300) (20,105)

Unit: Thousand Baht


Reconciliation between income tax expenses and the produce of accounting profits for the years ended December 31, 2018 and 2017

and applicable tax rates can be shown as follows:


2018 2017

BEFORE-TAX AMOUNT

TAX (EXPENSE) BENEFIT

NET-OF-TAX AMOUNT

BEFORE-TAX AMOUNT


NET-OF-TAX AMOUNT


Surplus (deficit) on

re-measuring investments (122,141,251) 24,428,250 (97,713,001) 101,068,638 (24,556,881) 76,511,757

Total (122,141,251) 24,428,250 (97,713,001) 101,068,638 (24,556,881) 76,511,757



2018 2017 2018 2017

(THOUSAND BAHT)

RATE (%)

(THOUSAND BAHT)

RATE (%)

(THOUSAND BAHT)

RATE (%)

(THOUSAND BAHT)

RATE (%)

Income (loss) before income tax (60,347) 20 222,943 20 17,753 20 106,209 20

Income tax at the domestic

tax rate (12,069) 44,588 3,551 21,242

Deferred tax relating to

origination and reversal

of temporary differences (25,399) (19,499) (24,300) (20,105)

Tax effect of income and

expenses that are not

taxable and not

deductible for tax purposes 12,069 (36,777) (3,551) (21,242)

Income corporate income tax

as statements of profit or loss

and other comprehensive income (25,399) 42.1 (11,688) (5.2) (24,300) (136.9) (20,105) (18.9)

The Company used a tax rate of 20% for calculation of income tax expense for the years ended December 31, 2018 and 2017. Income

tax expense is calculated from income before tax, added back transactions which were non-deductible expenses and deducted income

or expense exemption under the Revenue Code.

Income tax recognized in component of other comprehensive income (loss)


39. Basic and diluted earnings (loss) per share

The calculations of earnings (loss) per share for the years ended December 31, 2018 and 2017 were based on the income (loss) for

the years attributable to ordinary shareholders of the Company and the number of weighted ordinary shares outstanding during the

years held by shareholders as follows:

Diluted earnings per share occurred from warrants to purchase ordinary shares described in the notes to the financial statements No. 24.


2018 2017

BEFORE-TAX AMOUNT


NET-OF-TAX AMOUNT

BEFORE-TAX AMOUNT


NET-OF-TAX AMOUNT


Surplus (deficit) on

re-measuring investments (98,929,929) 19,785,986 (79,143,943) 122,451,960 (24,490,392) 97,961,568

Total (98,929,929) 19,785,986 (79,143,943) 122,451,960 (24,490,392) 97,961,568



2018 2017 2018 2017

Basic earnings (loss) per share

Income (loss) attributable to owners of the Company (Baht) (35,066,631) 234,315,235 42,053,374 126,314,328

Weighted average number of ordinary shares (shares) 4,336,888,900 4,336,758,428 4,336,898,750 4,336,768,278

Basic earnings (loss) per share (Baht) (0.0081) 0.0540 0.0097 0.0291

Diluted earnings (loss) per share


used in calculation of basic earnings per share (shares) 4,336,888,900 4,336,758,428 4,336,898,750 4,336,768,278

Effect of exercised warrants to purchase

ordinary shares - - - -


used in the calculation of diluted earnings

per share (shares) 4,336,888,900 4,336,758,428 4,336,898,750 4,336,768,278Diluted earnings (loss) per share (Baht) (0.0081) 0.0540 0.0097 0.0291


40. Commitments and contingent liabilities

40.1 As at December 31, 2018 and 2017 the Company and its subsidiaries had operating lease commitments for office building and

vehicles as follows:

The operating lease agreements of the Company and its subsidiaries were recorded as expense in the statements of profit or loss

and other comprehensive income for the years ended December 31, 2018 and 2017 as follows:



2018 2017 2018 2017

Not later than 1 year 23.5 32.3 7.3 6.1

Later than 1 year but not later than 5 years 29.9 13.8 18.2 1.9

Total 53.4 46.1 25.5 8.0

Unit: Million Baht

Unit: Million Baht



2018 2017 2018 2017

Operating lease agreements 37.1 33.1 7.2 6.9

40.2 As at December 31, 2018 and 2017, the Company and its subsidiaries have the outstanding commitment in respect of benefit

paid to employees which the Company had already entered of approximately Baht 3.3 million and approximately Baht 2.4 million,

respectively.

40.3 As at December 31, 2016, the subsidiary has been sued by the client (“plaintiff”) as a second defendant with the former employee

of the subsidiary as a first defendant in the amount of Baht 107.5 million. The subsidiary as an employer at that time has been

argued that the subsidiary did not instruct or authorize the first defendant to operate as the plaintiff sued and did not intentionally

or negligently or acts or omissions in violation of the plaintiff. The subsidiary believes that this litigation is unlikely to damage the

Subsidiary.

On July 18, 2017, the plaintiff and the first defendant agreed to settle the case in accordance with Settle Agreement. The

plaintiff filed a motion requesting for withdrawal of complaint against the second defendant (“the subsidiary”) and the court

allowed suchcomplaint withdrawal. Between the plaintiff and the first defendant, the court rendered the court’s judgment

that the case is ultimate in accordance with Settle Agreement.

41. Related party transactions

Related parties are those parties linked to the Group and Company by common shareholders or directors. Transactions with related

parties are conducted at the pricing policy based on the normal course of business conditions.

The pricing policies for particular types of transactions are explained further below:

PRICING POLICIES

Brokerage fees


Expenses

At market price which is the same rate as general client

At agreed price which approximates market value

At market price


Significant transactions with related parties for the years ended December 31, 2018 and 2017 were as follows:

RELATIONSHIP



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Brokerage fees from securities

and derivatives business

Mutual fund managed by associate Associate 57,849,357 74,039,866 - -

Related persons Related persons 2,487,515 618,847 - -

Total 60,336,872 74,658,713 - -

Ongoing fee

MFC Asset management Public company Limited Associate 576,344 479,314 - -


MFC Asset Management Public Company Limited Associate 253,366 411,610 - -

Country Group Development

Public Company Limited

Related company

14,850,000 - - -

Total 15,103,366 411,610 - -

Dividend income

Country Group Securities Public Company Limited Subsidiary - - - 97,728,944

MFC Asset Management Public Company Limited Associate - - 43,900,990 47,811,796

Padaeng Industry Public Company Limited Associate - - 84,749,850 56,499,900

Total - - 128,650,840 202,040,640


Related persons Related persons 5,368,041 466,937 - -

Interest income

Country Group Securities Public Company Limited Subsidiary - - 360,480 189,506


RELATIONSHIP



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Finance costs

Country Group Securities Public Company Limited Subsidiary - - 1,088,325 9,902,055

Padaeng Industry Public Company Limited Associate 2,611,716 1,064,511 - -

Country Group Development Public Company Limited Related company 44 306,256 - -

Related persons Related persons 131,611 29,215 - -

Total 2,743,371 1,399,982 1,088,325 9,902,055

Fee and service expenses


MFC Asset Management Public Company Limited Associate 800,915 1,168,428 620,713 950,792

Total 800,915 1,168,428 18,603,696 20,486,345

Premises and equipment expenses

EDP Enterprise Company Limited Related company 1,365,600 1,365,600 - -

Other expenses

Country Group Securities Public Company Limited Subsidiary - - - 468,126

Sing Sian Yer Pao Company Limited Related company 449,400 925,550 - -

Total 449,400 925,550 - 468,126

Dividend paid

Country Group Securities Public Company Limited Subsidiary - - 345 273

MFC Asset Management Public Company Limited Associate 1,505,000 1,192,820 1,505,000 1,192,820

Padaeng Industry Public Company Limited Associate 621,705 437,967 621,705 437,967

Mutual fund managed by associate Associate 11,679,938 - 11,679,938 -

Country Group Development Public Company Limited Related company 5,357,163 4,245,934 5,357,163 4,245,934

Related persons Related persons 25,417,978 7,496,694 25,417,978 7,496,694

Related persons Directors 28,703,771 22,751,176 28,703,771 22,751,176

Total 73,285,555 36,124,591 73,285,900 36,124,864


Significant balances with related parties as at December 31, 2018 and 2017 were as follows:

RELATIONSHIP



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Deposits for customers’ account

Country Group Development Public Company Limited Related company 5,523 5,479 - -

Related persons Related persons 12,182,596 13,045,513 - -

Total 12,188,119 13,050,992 - -

Current investments

Country Group Development Public Company Limited Related company 42,996,969 - - -

Trade and other current receivables


Genki Capital Co., Ltd. Subsidiary - - 311,100 311,100

Genki Power One Co., Ltd. Indirect subsidiary - - 2,710,718 2,640,260

Tech Reform Co., Ltd. Common director 629,160 629,160 629,160 629,160

Solar Technic Co., Ltd. Common director 629,160 629,160 629,160 629,160

MFC Asset Management Public Company Limited Associate - 26,857 - -

Total 1,258,320 1,285,177 50,514,185 193,772,321


MFC Asset Management Public Company Limited Associate 17,080,580 - - -

Related persons Related persons 185,870,566 19,301,243 - -

Total 202,951,146 19,301,243 - -

Short-term loan to a subsidiary

Genki Power One Co., Ltd. Indirect subsidiary - - 69,132,650 -


Country Group Development Public Company limited Related company 952,261,248 985,233,060 952,261,248 985,233,060

Matual fund managed by associate Associate 71,687,553 62,192,546 - -

Total 1,023,948,801 1,047,425,606 952,261,248 985,233,060


RELATIONSHIP



2018 2017 2018 2017

BAHT BAHT BAHT BAHT

Investments in associates

MFC Asset Management Public Company

Limited

Associate 507,461,385 527,722,128 675,007,170 675,007,170

Padaeng Industry Public Company Limited Associate 1,057,719,337 1,150,159,267 827,441,950 827,441,950

Total 1,565,180,722 1,677,881,395 1,502,449,120 1,502,449,120

Investment in subsidiaries

Country Group Securities Public Company Limited Subsidiary - - 3,463,625,181 3,463,422,524

Genki Capital Co., Ltd. Subsidiary - - 25,000,000 25,000,000

Total - - 3,488,625,181 3,488,422,524

Trade and other current payables


MFC Asset Management Public Company Limited Associate - 56,753 - 56,753

Sing Sian Yer Pao Company Limited Related company - 74,900 - -

Total - 131,653 20,795,920 76,908,740

Securities payables




Short-term loan from a subsidiary

Country Group Securities Public Company

Limited

Subsidiary - - 16,178,082 5,000,000

Debentures

Country Group Securities Public Company

Limited

Subsidiary - - 42,979,554-


42.

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disc

lose

s op

erat

ing

segm

ents

info

rmat

ion

in a

ccor

danc

e w

ith th

e Th

ai F

inan

cial

Rep

ortin

g St

anda

rd N

o. 8

(Rev

ised

201

7) “O

pera

ting

Segm

ents

” and

und

er th

e sa

me

basi

s as

inte

rnal

man

agem

ent r

epor

ts p

rese

nted

to th

e C

ompa

ny’s

chi

ef o

pera

ting

deci

sion

mak

er fo

r res

ourc

es a

lloca

tion

to a

nd p

erfo

rman

ce e

valu

atio

n of

var

ious

seg

men

ts.

The

Com

pany

and

its

subs

idia

ries’

bus

ines

s op

erat

ions

invo

lve

3 pr

inci

pal s

egm

ents

: sec

uriti

es a

nd d

eriv

ativ

es b

roke

rage

seg

men

t, in

vest

men

t ban

king

seg

men

t and

sec

uriti

es a

nd d

eriv

ativ

es tr

adin

g

segm

ent.

Thes

e op

erat

ions

are

car

ried

on in

Tha

iland

. Bel

ow is

the

oper

atin

g se

gmen

t of t

he C

ompa

ny a

nd it

s su

bsid

iarie

s in

form

atio

n fo

r the

yea

rs e

nded

Dec

embe

r 31,

201

8 an

d 20

17 w

ere

as fo

llow

s:

Uni

t : T

hous

and

Baht

CO

NSO

LID

ATED

FIN

AN

CIA

L S

TATE

MEN

TS

SEC

UR

ITIE

S A

ND

D

ERIV

ATIV

ESB

RO

KER

AG

E SE

GM

ENT

INV

ESTM

ENT

BA

NK

ING

SEG

MEN

TSE

CU

RIT

IES

AN

D

DER

IVAT

IVES

TRA

DIN

G S

EGM

ENT

OTH

ERTO

TAL

2018

2017

2018

2017

2018

2017

2018

2017

2018

2017

Reve

nues

:

Brok

erag

e fe

es30

0,17

121

4,22

0-

--

--

-30

0,17

121

4,22

0

Fees

and

ser

vice

s in

com

e1,

785

7,27

429

,552

18,8

1343

,073

25,8

611,

214

183

75,6

2452

,131

Inte

rest

on

mar

gin

loan

s28

,632

14,2

75-

--

--

-28

,632

14,2

75

Inte

rest

and

div

iden

ds-

--

-90

,885

13,5

1015

,256

46,0

0310

6,14

159

,513

Gai

n on

inve

stm

ents

and

deriv

ativ

es96

3,67

2-

-56

,098

157,

774

-59

,301

56,1

9422

0,74

7

Gai

n on

cla

ssifie

d in

vest

men

ts

in a

ssoc

iate

s to

inve

stm

ent

h

eld

as a

vaila

ble

for s

ale

--

--

--

-21

,612

-21

,612

Oth

er in

com

e-

--

--

-15

,357

24,9

4615

,357

24,9

46

Sha

re o

f pro

fit fro

m in

vest

men

ts

in

ass

ocia

tes

--

--

--

34,3

8724

3,06

434

,387

243,

064

Tota

l rev

enue

s33

0,68

423

9,44

129

,552

18,8

1319

0,05

619

7,14

566

,214

395,

109

616,

506

850,

508

Expe

nses

(676

,853

)(6

27,5

65)

Inco

me

(loss

) bef

ore

inco

me

tax

(60,

347)

222,

943

Inco

me

tax

inco

me

25,3

9911

,688

Net

inco

me

(loss

) for

the

year

s(3

4,94

8)23

4,63

1


Asse

ts c

lass

ified

by s

egm

ent i

n co

nsol

idat

ed fin

anci

al s

tate

men

ts

Uni

t : T

hous

and

Baht

ASS

ETS

BY

SEG

MEN

TSE

CU

RIT

IES

AN

DD

ERIV

ATIV

ES

BR

OK

ERA

GE

SEG

MEN

T

INV

ESTM

ENT

BA

NK

ING

SEG

MEN

T

SEC

UR

ITIE

S A

ND

DER

IVAT

IVES

TR

AD

ING

SEG

MEN

T

TOTA

L SE

GM

ENTS

U

NA

LLO

CAT

EDA

SSET

STO

TAL

As a

t Dec

embe

r 31,

201

81,

546,

087

32,5

436,

456,

736

8,03

5,36

61,

124,

750

9,16

0,11

6

As a

t Dec

embe

r 31,

201

71,

119,

435

24,4

832,

148,

185

3,29

2,10

35,

511,

625

8,80

3,72

8

43.

Ris

k m

anag

emen

t

43

.1

Cre

dit r

isk

C

redi

t ris

k is

the

risk

that

the

party

to a

fina

ncia

l ins

trum

ent w

ill fa

il to

fulfil

l an

oblig

atio

n ca

usin

g th

e C

ompa

ny a

nd it

s su

bsid

iarie

s to

incu

r a

finan

cial

loss

. The

fina

ncia

l ass

ets

of th

e

C

ompa

ny a

nd it

s su

bsid

iarie

s w

ere

not s

ubje

ct to

sig

nific

ant c

once

ntra

tion

of c

redi

t ris

k. T

he m

axim

um c

redi

t ris

k ex

posu

re is

the

carry

ing

amou

nt o

f the

fina

ncia

l ass

ets,

less

pro

visi

on

fo

r los

ses,

as

stat

ed in

the

stat

emen

ts o

f fina

ncia

l pos

ition

.

43

.2

Inte

rest

rate

risk

In

tere

st ra

te ri

sk is

the

risk

that

the

valu

e of

a fin

anci

al in

stru

men

t will

fluct

uate

due

to c

hang

es in

mar

ket i

nter

est r

ates

and

it w

ill af

fect

the

oper

atio

n re

sults

of t

he C

ompa

ny a

nd it

s su

bsid

iarie

s

an

d its

cas

h flo

ws.


Uni

t : M

illion

Bah

t

CO

NSO

LID

ATED

FIN

AN

CIA

L ST

ATEM

ENT

AS

AT D

ECEM

BER

31,

201

8

OU

TSTA

ND

ING

BA

LAN

CES

OF

NET

FIN

AN

CIA

L IN

STR

UM

ENTS

REP

RIC

ING

OR

MAT

UR

ITY

DAT

ES

FLO

ATIN

GR

ATE

LESS

TH

AN

1 Y

EAR

1-5

YEA

RS

OV

ER5

YEA

RS

NO

N-

PERF

ORM

ING

RECE

IVA

BLES

NO

INTE

RES

TTO

TAL

INTE

RES

T R

ATE

(%)

FLO

ATIN

GR

ATE

FIX

EDR

ATE

Fina

ncia

l ass

ets

Cash

and

cas

h eq

uiva

lent

s67

8.5

--

--

86.2

764.

70.

25 -

1.10

-

Curre

nt in

vest

men

ts-

2,35

2.1

--

-99

0.5

3,34

2.6

-1.

90 -

7.25

Trad

e an

d ot

her c

urre

nt re

ceiva

bles

--

--

-10

2.3

102.

3-

-

Rece

ivabl

es fr

om C

lear

ing

Hous

e

an

d br

oker

-dea

lers

--

--

-24

1.4

241.

4-

-

Secu

ritie

s bu

sines

s re

ceiva

bles

522.

2-

--

28.5

771.

41,

322.

16.

25 -

18.0

0-

Inve

stm

ent h

eld

as a

vaila

ble

for s

ale

--

--

-1,

264.

01,

264.

0-

-

Oth

er lo

ng-te

rm in

vest

men

ts-

--

--

5.7

5.7

--

Fina

ncia

l lia

biliti

es

Trad

e an

d ot

her c

urre

nt p

ayab

les

--

--

-12

4.7

124.

7-

-

Paya

bles

from

Cle

arin

g H

ouse

an

d br

oker

-dea

lers

--

-24

6.2

246.

2-

-

Secu

ritie

s bu

sines

s pa

yabl

es-

--

--

1,63

0.0

1,63

0.0

--

Debt

s iss

ued

and

borro

wing

s-

211.

2-

--

-21

1.2

-3.

10 -

3.50

Debe

ntur

es-

-1,

036.

8-

--

1,03

6.8

-6.

25


Uni

t : M

illion

Bah

t

CO

NSO

LID

ATED

FIN

AN

CIA

L ST

ATEM

ENT

AS

AT D

ECEM

BER

31,

201

7

OU

TSTA

ND

ING

BA

LAN

CES

OF

NET

FIN

AN

CIA

L IN

STR

UM

ENTS

REP

RIC

ING

OR

MAT

UR

ITY

DAT

ES

FLO

ATIN

GR

ATE

LESS

TH

AN

1 Y

EAR

1-5

YEA

RS

OV

ER5

YEA

RS

NO

N-

PERF

ORM

ING

RECE

IVA

BLES

NO

INTE

RES

TTO

TAL

INTE

RES

T R

ATE

(%)

FLO

ATIN

GR

ATE

FIX

EDR

ATE

Fina

ncia

l ass

ets

Cash

and

cas

h eq

uiva

lent

s1,

160.

3 -

--

-76

.4

1,23

6.7

0.10

-1.6

0-

Curre

nt in

vest

men

ts -

1

,950

.0

--

- 1

,175

.1

3,1

25.1

-

2.50

-3.6

0

Trad

e an

d ot

her c

urre

nt re

ceiva

bles

--

--

-67

.5

67

.5

--

Rece

ivabl

es fr

om C

lear

ing

Hous

e

an

d br

oker

-dea

lers

--

--

- 4

40.3

4

40.3

-

-

Secu

ritie

s bu

sines

s re

ceiva

bles

362.

8-

--

- 3

59.5

7

22.3

6.

25-1

8.00

-

Inve

stm

ent h

eld

as a

vaila

ble

for s

ale

--

--

-1,

131.

31,

131.

3-

-

Oth

er lo

ng-te

rm in

vest

men

ts-

--

--

5.5

5.5

--

Fina

ncia

l lia

biliti

es

Trad

e an

d ot

her c

urre

nt p

ayab

les

--

--

- 1

14.7

11

4.7

--

Secu

ritie

s bu

sines

s pa

yabl

es-

--

--

1,2

55.8

1,2

55.8

--

Debt

s iss

ued

and

borro

wing

s -

144.

2 -

--

- 1

44.2

-

3.20

-3.5

0

Debe

ntur

es-

-1,

079.

8-

--

1,0

79.8

-

6.25


Uni

t : M

illion

Bah

t

SEPA

RAT

E F

INA

NC

IAL

STA

TEM

ENT

AS

AT D

ECEM

BER

31,

201

8

OU

TSTA

ND

ING

BA

LAN

CES

OF

NET

FIN

AN

CIA

L IN

STR

UM

ENTS

REP

RIC

ING

OR

MAT

UR

ITY

DAT

ES

FLO

ATIN

GR

ATE

LESS

TH

AN

1 Y

EAR

1-5

YEA

RS

OV

ER5

YEA

RS

NO

N-

PERF

ORM

ING

RECE

IVA

BLES

NO

INTE

RES

TTO

TAL

INTE

RES

T R

ATE

(%)

FLO

ATIN

GR

ATE

FIX

EDR

ATE

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

ts20

5.1

--

--

16.2

221.

30.

37 -

0.38

-

Cur

rent

inve

stm

ents

-71

1.0

--

-36

6.4

1,07

7.4

-1.

90 -

7.25

Trad

e an

d ot

her c

urre

nt re

ceiv

able

s-

--

64.9

64.9

--

Shor

t-ter

m lo

an to

a s

ubsi

diar

y-

69.1

--

--

69.1

-3.

00

Inve

stm

ent h

eld

as a

vaila

ble

for s

ale

--

--

-1,

109.

31,

109.

3-

-49.9

Fina

ncia

l lia

bilit

ies

Trad

e an

d ot

her c

urre

nt p

ayab

les

--

--

-49

.949

.9-

-

Shor

t-ter

m lo

an fr

om a

sub

sidi

ary

-16

.2-

--

-16

.2-

3.00

Deb

entu

res

--

1,07

9.8

--

-1,

079.

8-

6.25


Uni

t : M

illion

Bah

t

SEPA

RAT

E F

INA

NC

IAL

STA

TEM

ENT

AS

AT D

ECEM

BER

31,

201

7

OU

TSTA

ND

ING

BA

LAN

CES

OF

NET

FIN

AN

CIA

L IN

STR

UM

ENTS

REP

RIC

ING

OR

MAT

UR

ITY

DAT

ES

FLO

ATIN

GR

ATE

LESS

TH

AN

1 Y

EAR

1-5

YEA

RS

OV

ER5

YEA

RS

NO

N-

PERF

ORM

ING

RECE

IVA

BLES

NO

INTE

RES

TTO

TAL

INTE

RES

T R

ATE

(%)

FLO

ATIN

GR

ATE

FIX

EDR

ATE

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

ts23

8.8

--

--

2.9

2

41.7

0.

10-

Cur

rent

inve

stm

ents

-1,

024.

2-

--

359

.5

1,3

83.7

-

3.00

-6.5

0

Trad

e an

d ot

her c

urre

nt re

ceiv

able

s-

--

--

209

.8

209

.8

--

Inve

stm

ent h

eld

as a

vaila

ble

for s

ale

--

--

- 9

86.0

9

86.0

-

-

Fina

ncia

l lia

bilit

ies

Trad

e an

d ot

her c

urre

nt p

ayab

les

--

--

- 1

13.3

1

13.3

-

-

Shor

t-ter

m lo

an fr

om re

late

d co

mpa

ny-

5.0

--

--

5.0

-3.

00

Deb

entu

res

--

1,07

9.8

--

-1,

079.

8-

6.25


The average yields on the average financial asset balances and the average cost of funds on average financial liabilities for interest

bearing financial instruments were presented in the following table:

Unit : Million Baht



AVERAGE BALANCE

INTEREST INCOME/EXPENSES

AVERAGE YIELD(%)

Financial assets

Cash and cash equivalents 878.3 12.6 1.4

Investments 2,117.0 39.5 1.9

Securities business receivables 456.4 29.2 6.4

Financial liabilities

Debts issued and borrowings 185.6 6.0 3.2

Debentures 1,079.8 67.5 6.3

Unit : Million Baht



AVERAGE BALANCE


AVERAGE YIELD(%)

Financial assets


Investments 1,382.8 16.8 1.2

Securities business receivables 206.5 14.3 6.9


Debts issued and borrowings 117.2 1.6 3.3

Debentures 90.0 5.7 6.4


43.3 Liquidity risk

Under the Notification of the Office of the Securities and Exchange Commission No. KorTor 32/2560 regarding “Net Capital

Ratio - NCR”, the securities company has to maintain its net capital requirement at the end of the day not less than Baht 15.0

million and not less than 7% of general liabilities.

The subsidiary was granted securities business licenses of derivatives agent under the Derivative Act. The subsidiary has to

maintain its net liquid capital at the end of working day at least Baht 25.0 million and at least 7% of general liabilities and

assets held as collateral except in case the Company discontinued its derivatives agent business and notified to the Office

of the Securities and Exchange Commission, the Company has to maintain its net liquid capital as mentioned in the above

paragraph.

Unit : Million Baht



AVERAGE BALANCE


AVERAGE YIELD(%)

Financial assets


Current investments 570.7 23.1 4.1

Short-term loan to a subsidiary 1.1 0.1 6.2


Short-term loan from related company 16.2 0.5 3.1

Debentures 1,079.8 67.5 6.3

Unit : Million Baht



AVERAGE BALANCE


AVERAGE YIELD(%)

Financial assets


Current investments 127.5 2.0 1.6


Short-term loan from related company 301.3 9.9 3.3

Debentures 90.0 5.7 6.4


Additionally, in accordance with the regulation of Thailand Clearing House Co., Ltd. (“TCH”) chapter 300 “Members”

regarding the “Qualification of an Associated Member”, the Associated Member is required to have total owners’ equity

of not less than Baht 150.0 million and/or have a financial condition in accordance with the criteria prescribed by an agency

in charge of overseeing the business operations of such juristic person under relevant law.

As December 31, 2018 and 2017, the subsidiary has net capital per requirement of approximately Baht 2,002.7 million and

approximately Baht 2,165.1 million, respectively or 99.0% and 132.4% of general liabilities and assets held as collateral,

respectively.

The periods of time from the statement of financial position date to the maturity dates of financial instruments as of December

31, 2018 and 2017 were as follows:

Unit: Million Baht



OUTSTANDING BALANCES OF NET FINANCIAL INSTRUMENTS

AT CALL WITHIN1 YEAR

1-5YEARS

OVER5 YEARS

NOMATURITY

NON-PERFORMINGRECEIVABLES

TOTAL

Financial assets

Cash and cash equivalents - - - - 764.7 - 764.7

Current Investments - 2,406.1 - - 936.5 - 3,342.6

Trade and other current receivables - 102.3 - - - - 102.3


and broker-dealers - 241.4 - - - - 241.4

Securities business receivables 522.2 771.4 - - - 28.5 1,322.1

Investment held as available for sale - - - - 1,264.0 - 1,264.0

Other long-term investments - - - - 5.7 - 5.7


Trade and other current payables - 124.7 - - - - 124.7

Payables from Clearing House


Securities business payables - 1,630.0 - - - - 1,630.0

Debts issued and borrowings - 211.2 - - - - 211.2

Debentures - - 1,036.8 - - - 1,036.8


Unit: Million Baht





1-5YEARS

OVER5 YEARS

NOMATURITY


TOTAL

Financial assets

Cash and cash equivalents - - - - 1,236.7 - 1,236.7





Securities business receivables 362.8 338.0 - - 21.5 - 722.3


Other long-term investments - - - - 5.5 - 5.5



Securities business payables - 1,255.8 - - - - 1,255.8

Debts issued and borrowings - 144.2 - - - - 144.2

Debentures - - 1,079.8 - - - 1,079.8


Unit: Million Baht





1-5YEARS

OVER5 YEARS

NOMATURITY


TOTAL

Financial assets


Current Investments - 711.0 - - 366.4 - 1,077.4


Short-term loan to a subsidiary 69.1 - - - 69.1




Short-term loan from related company 16.2 - - - - - 16.2

Debentures - - 1,079.8 - - - 1,079.8

Unit: Million Baht





1-5YEARS

OVER5 YEARS

NOMATURITY


TOTAL

Financial assets




Investment held as available for sale - - - - 986.0 - 986.0



Short-term loan from related company 5.0 - - - - - 5.0

Debentures - - 1,079.8 - - - 1,079.8


43.4 Market risk

The Company and its subsidiaries’ exposure to market risk is the risk that volatility on the stock price and derivatives

price that will substantially reduce the value of the Company’s investments. However, the Company and its subsidiaries

manage such risk at acceptable levels through risk management policies, and establishment of proper risk limits and

parameters, as well as a market risk monitoring function.

43.5 Foreign exchange risk

As at December 31, 2018 and 2017, the Company and its subsidiaries had financial instruments in foreign currencies

as follow;

43.6 Fair value

The fair value disclosures of financial instruments, considerable judgment is necessarily required in estimation of fair

value. Accordingly, the estimated fair value presented herein is not necessarily indicative of the amount that could be

realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may

have a material effect on the estimated fair value. The following methods and assumptions were used by the Company

and its subsidiaries in estimating fair values of financial instruments.

43.6.1 Financial assets and financial liabilities measured at fair value

Certain financial assets and financial liabilities of the Company and its subsidiaries were measured at fair value at the

end of reporting period. The following table gives information about how the fair values of these financial assets and

financial liabilities are determined.

Unit: Thousand Baht

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT


ASSETS LIABILITIES

FAIR VALUE CONTRACT VALUE


Trading investments - derivatives

Forward contract 99,844 99,844 98,484 99,844

Total 99,844 99,844 98,484 99,844

Unit: Thousand Baht

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT


ASSETS LIABILITIES



Trading investments - derivatives

Forward contract 151,837 151,837 150,184 151,837

Total 151,837 151,837 150,184 151,837


Uni

t: Th

ousa

nd B

aht

CO

NSO

LID

ATED

FIN

AN

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FAIR

VA

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IR V

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E H

IER

AR

CH

YVA

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HN

IQU

ES

AN

D K

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PUTS

2018

2017

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ets

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rent

inve

stm

ents

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Uni

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sts

167,

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ass

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oted

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2,35

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rate

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ai B

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Uni

t: Th

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S

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BER

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IR V

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CH

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l Ass

ets

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rent

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U

nit t

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s16

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uriti

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6,75

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ock

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ange

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43.6.2 Financial assets and financial liabilities not measured at fair value

Fair value of Financial assets and financial liabilities which were not measured at fair value and their fair value hierarchy level

classification were summarized as follows:

Unit: Thousand Baht

FINANCIAL ASSETS/FINANCIAL LIABILITIES


FAIR VALUEHIERARCHY


CARRYING AMOUNT

FAIR VALUECARRYING AMOUNT

FAIR VALUE

Financial assets

Cash and cash equivalents 764,689 764,689 1,236,650 1,236,650 3

Trade and other current receivables 102,298 102,298 67,507 67,507 3


and broker-dealers 241,387 241,387 440,349 440,349 3

Securities business receivables 1,322,104 1,322,104 722,324 722,324 3

Deposits at financial institutions 54,240 54,240 54,240 54,240 3

General Investment

Listed securities 5,746 5,746 5,489 5,898 3


Trade and other current payables 124,722 124,722 114,722 114,722 3

Payables to Clearing House

and broker-dealers 246,174 246,174 - - 3

Securities business payables 1,630,005 1,630,005 1,255,813 1,255,813 3

Debts issued and borrowings 211,167 211,167 144,215 144,215 3

Debentures 1,036,820 1,036,820 1,079,800 1,079,800 3


The fair values of the financial assets and financial liabilities above, which presented in statement of financial position were considered

to approximate their respective carrying value since the fair value were predominantly subject to market interest rate and mature in the

short-term except general investment in equity securities which use net asset value of invested company.

44. Approval of financial statements

These financial statements were authorized for issue by the Board of Directors of the Company on February 26, 2019.

Unit: Thousand Baht

FINANCIAL ASSETS/

FINANCIAL LIABILITIES


FAIR VALUEHIERARCHY


CARRYING AMOUNT

FAIR VALUE CARRYING AMOUNT

FAIR VALUE

Financial assets

Cash and cash equivalents 221,318 221,318 241,715 241,715 3

Trade and other current receivables 64,883 64,883 209,829 209,829 3

Short-term loan to a subsidiary 69,133 69,133 - - 3


Trade and other current payables 49,852 49,852 113,303 113,303 3

Short-term loan from a subsidiary 16,178 16,178 5,000 5,000 3

Debentures 1,079,800 1,079,800 1,079,800 1,079,800 3


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